Hey friends, If you recently took up a role in Sales, then you would have frequently heard the two terms Topline and Bottomline from your executive level bosses. If you want know what are those, you have come to the right place.
In this case, the revenue which you generate on making sales is called Topline and the net profit or net income which you generated after deducting all operating expenses and taxes from the revenue is what is known as Bottomline.
These two Business Jargons have simpler meaning than they appear to be. Let me tell you what do they mean.
In any business, while you are doing sales, you would make revenue by selling something. Obviously, Once you sell the products or services, you cannot keep the whole revenue with yourself or organization. Major chunk of that revenue goes towards meeting the cost of making the product, income taxes, hr and administration costs involved in managing staff, etc. After deducting all these operating expenses and taxes, what we are left with is the net profit or net income which we can keep which belongs to shareholders and if they wish to, can be invested further into the business.
Whenever business executives discuss their financials, they monitor these two numbers very closely. Increasing Topline is one of the priority for them to increase the organization growth. However, with this they cannot ignore Bottomline growth because, if they are not left with enough cash after selling products and services, the business cannot survive for long and is not sustainable for long.
Hence both the metrics should be monitored together since both go hand in hand for a sustainable growth of business.
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