How Much Does It Cost To Rent a Billboard? Tips & Price Breakdown

Managing accounts and balancing the books are essential business owner tasks, and there are many accounting terms they have to familiarize themselves with. One of the most significant is annual revenue. In this guide, we’ll talk about what yearly revenue is, why it’s critical for business owners to understand, and discuss annual revenue vs. profit. We’ll also provide advice about calculating this section of your business finances. What Is Annual Revenue? Annual revenue is a financial term used to describe the amount of money a business earns, often in sales, during a fiscal year. Revenues takings only - they do not deduct business expenses. Knowing their expected and achieved annual business revenue enables company owners to monitor income before costs and track progress over time. Changes in yearly revenue are one of the primary indicators of business health. For example, the annual revenue on your tax return is the income generated by product or service sales, as well as business-owned assets. Gross annual revenue is different from net annual income, which is what your earnings amount to once costs - e.g., supply, payroll, and damage costs - have been deducted from the total. The annual revenue abbreviation can be GAR (gross annual revenue) or ARR (annual recurring revenue). Is Annual Revenue the Same as Sales? Although annual revenue and sales are sometimes used interchangeably when discussing company accounting, the meaning of annual revenue goes beyond just sales, as it includes all forms of income a business reaps, such as capital donations, funding, etc. For example, if a company rents out a part of its owned premises, the proceeds will not be recorded as sales profits, but will be included in annual revenue. How To Find Annual Revenue for a Company To calculate your annual revenue, you need to multiply the price at which you sold products or services by the quantities of each product or service sold. That gives us the following revenue formula: Annual Revenue = Sales Price X Number of Products Sold Simply put, if your business priced a product at $100 and you sold 2,000 of those products during the year, your annual revenue from that would be $200,000. However, multiplying your yearly sales by their prices is just the beginning of your accounting process. Next, you’ll subtract all the expenses your business has had in the same timeframe - that will get you the total of your annual profits. Calculating Your Net Income If we continue with the example described above, your annual revenue is $200,000. However, your business spends $10,000 per year on developing products and another $50,000 on wages. Additional business expenses, including the business taxes you’ve filed, rent, and utilities, cost a further $10,000. You can now calculate your net income, as follows: Annual Revenue - Expenses = Net Annual Income The figure would be $200,000 - $10,000 - $50,000 - $10,000, which amounts to $130,000. This is a pretty decent yearly profit, especially for a small-business owner. On the other hand, if your expenses exceeded your revenue, your net income would have been negative, indicating you’re losing money, even if you had a year-over-year increase in your gross revenue. Understanding Different Types of Revenue There are two main types of revenue for business owners and accountants to consider. These include operating revenue and non-operating revenue. Operating revenue is business income from the business's primary activities, e.g., sales of products and services. Non-operating revenue is income that a company generates from additional streams. Examples include: Asset and capital: For example, profits from selling old business equipment or machinery, office space, etc. Dividends: If a company invests in another business, the revenue they generate this way is classed as non-operating revenue. Interest: If the company lends money, or has a savings account, the money earned through interest is recorded as non-operating revenue. Rent: This is income generated through renting out business premises or equipment. Contra-revenue: Contra-revenue is a negative number covering unsold inventory or unpaid invoices. Further Reading The Best Payroll Software for Your Business Free Accounting Software Options: Our Top Picks The Best Online Bookkeeping Services for Small Businesses

Companies are increasingly using floating holidays to retain their talent, especially since the start of the Great Resignation. Employees are being offered more flexible time off work to improve morale and encourage them to stick around.  So, what is a floating holiday? It’s paid time off that gives employees more schedule flexibility. In the following post, we’ll take a look at some of the benefits of this practice and how to implement it in your organization.  Providing Floating Holiday A floating holiday is a benefit that lets employees take paid time off work but isn’t considered part of their paid annual leave or vacation time. Under such schemes, employees take time off at their discretion for personal reasons, special occasions, or religious holidays.  Floating holidays are available on any day the office is open. It can also be used to compensate employees who had to work on a standard holiday. Administering them manually can be burdensome, so most companies use human resources information systems to streamline their processes. Floating Holidays vs. PTO In most cases, employees are eligible to take floating holidays immediately upon joining a firm. This doesn’t apply to other types of holidays, which require accrual.  Employees typically start off with a base amount of paid time off or PTO and accumulate more the longer they work at a certain company. But unlike other types of PTO, floating holidays usually don’t carry over to the next year.      Floating Holidays vs. Vacation Floating holidays are not the same as standard vacation days. They are a perk that employers offer in addition to PTO.  Why Offer Floating Holiday? Floating days off offer advantages to both firms and employees. Here are some examples: It Gives Employees a Better Work-Life Balance Employers sometimes get into the habit of believing that life follows a strict schedule. Workers, they tell themselves, wake up in the morning, get ready, go to work, and then return home again. Everything goes like clockwork.  However, real life often disrupts these routines. Things come up, and sometimes employees need time off in addition to their standard PTO.  A floating holiday policy accommodates your employees’ needs for time off on short notice, enhancing their work-life balance. For instance, giving employees flexible time off enables them to seek regular medical check-ups, attend their kids’ birthday parties, or run urgent errands. They can also use floating holidays to bookend their existing vacation time, extending their breaks, if necessary. It Helps Keep Your Business Running During the Holidays Many companies automatically give people time off during Thanksgiving, Christmas, and New Year, assuming that everyone wants to spend these days with their families. However, in companies with diverse and inclusive teams, some employees might not celebrate these events.  A company floating holiday policy can help keep operations running at all times in situations like this. For instance, you can offer most employees leave around popular holiday times while keeping a skeleton crew to keep operations ticking over. The remaining employees can take a break at other times of the year. Arrangements like these can be especially beneficial in companies that have heavy workloads over holiday periods, such as online retailers, grocery stores, and medical facilities.  It Lets Employees Preserve More of Their PTO Workers sometimes need to take time off for sudden or unexpected personal reasons (such as weddings and funerals). However, they don’t always want to eat into their PTO for vacations or sick leave. A paid floating holiday lets them take days off when emergencies arise.  It Makes Your Culture More Inclusive Not everyone working in large firms has the same cultural background. The days they want to take off during the year differ. Therefore, offering a floating holiday policy to accommodate employees of different dissent is more inclusive and a way to do diversity right.  It Can Compensate Employees for Working on Standard Holidays Lastly, floating holidays can compensate employees for missing standard holidays. For instance, a software developer might have a strict deadline shortly after Christmas and not be able to meet the deadline without working through the holidays.  Floating holiday pay is reassurance for employees, promising them that they can take time off in the future, even if they can’t take standard holidays because of workloads. How to Create a Floating Holiday Policy We’ve discussed the meaning of floating holidays and why firms use them. Now it’s time to look at how to implement them.  When developing a floating holiday policy, it’s critical to communicate all the details so that employees know how it works. You’ll need to clearly describe how employees can take advantage of it, as some may not be familiar with the concept.  When creating a floating holiday policy, you’ll need to follow the steps outlined below:  Schedule all your paid holidays. These are days when the office is closed to everyone.  Choose how many floating holidays (or personal days) you want to offer. Generally, these are paid days off so long as the office is open.  Issue guidance on how employees should use their floating holidays. For instance, which days can they use as a floating holiday? How much notice do they need to give? Can they roll over their unused floating holiday into next year? Create a memo that makes it clear what floating holiday time is. This document should define:  Regular holiday time Vacation time Sick leave Floating holiday time Add the contents of the memo to your employee handbook and make sure all your employees have access to it.  Set the pay for floating holidays. They may be partially paid or fully paid.  Make it easy to administer the policy. You can do this with HR software. Wrapping Up We’ve started this article by asking a simple question: what is a floating holiday? Now you know that one of the biggest advantages of this practice is flexibility and the fact that it enables workers to take time off without eating into their other PTO. Another advantage is that it can be used on short notice, offering employees a better work-life balance and allowing them to get “life stuff” done or bookend their vacation time.

In the US, there are two main ways to earn a wage. These are earning a salary and getting paid hourly. There are pros and cons of both ways of running payroll. In this informative guide, we’ll discuss salary vs. hourly pay in detail, highlighting the advantages and disadvantages and explaining how both systems work.  What Is a Salary? Most people who have a job in the US are salaried employees. A salary is an annual wage paid monthly, biweekly, or weekly.  So, how do salaries work? If you receive a salary, you’ll get consistent payments in exchange for working a set number of hours. The amount of money you earn, the number of hours you work, and the frequency with which you get paid should all be outlined in your employment contract, while the payroll schedule and information about bonuses and tax deductions should be explained in your company’s employee handbook. Many employers operate a salary range for different jobs and levels of seniority. The salary value will usually reflect industry averages and the level of experience. Salaries can vary hugely, depending on the type of job, the sector, the level of demand for skilled employees, the level of experience and expertise, and the position within the company.  To calculate your yearly salary and turn it into monthly or weekly payments, your employer will take the total sum you earn in a year and divide it by the number of weeks or months to produce a total for each week, fortnight or month, depending on how often you get paid. This figure will represent your earnings before deductions.  What Is Hourly Pay? Hourly pay, also known as hourly wage or rate, is the amount of money you earn per hour of work. Hourly pay is an alternative to a salary. Rather than earning a set amount per year for working a fixed number of hours, people who are classed as hourly employees earn money per hour. If you work more hours, you’ll earn more. Let’s take a look at an hourly rate example: If you have an hourly rate of $40, and your employer wants you to work for 40 hours one week, they will pay you $1,600.  Your earnings will be calculated by taking the hourly rate or wage and multiplying it by the number of hours you work. Your employer should pay you for every hour you work.  Differences Between a Salary and Hourly Pay The way employees are paid can affect how much they earn for the work they do. Here are some key factors to consider when weighing in on hourly wage vs. salary: Exempt vs. nonexempt jobs One of the most important differences to understand between a salaried employee and a worker with an hourly rate has to do with the category of exempt versus nonexempt jobs. The Fair Labor Standards Act governs the majority of jobs in the US. Under this law, exempt jobs don’t receive overtime pay. If your job is classified as nonexempt, you’re entitled to overtime pay if you work more than 40 hours per week in a single week. Overtime pay is 50% higher than your standard pay rate.  Most salaried employees are exempt, which means they don’t earn extra money for overtime. However, if a salaried employee is classed as nonexempt, their employer must pay overtime wages in line with the FLSA. This is designed to protect worker rights.  Hourly workers are nonexempt, which means employers must pay them overtime in line with federal guidelines for salary vs. hourly pay. If an hourly worker works over 40 hours in a given week, they must be compensated at a rate of 150% for any extra hours. This means that if an employee has an hourly rate of $20 and they work 50 hours in a single week, they’ll be paid $20 per hour for 40 hours and then $30 per hour for the extra 10 hours.  Set hours  Before the beginning of the onboarding process, employees who have a salary will sign an employment contract, which outlines how many hours they’re required to work per week. They’ll have fixed hours every month and receive a fixed payment every week, fortnight, or month.  It’s more common for hourly workers to have a more flexible schedule since they may not be guaranteed set hours or a minimum number of hours per week. Some hourly workers have weeks or months that are much busier or quieter than others.  Payment rules There are rules for hourly workers as well as salaried employee rules. Hourly workers must be paid the minimum wage, which varies from state to state. Salaried employees earn a wage based on a minimum annual compensation figure. The total for the year is divided by the number of payments to produce the weekly or monthly wage value. If an employee has a salary of $120,000, which is paid monthly, they’ll be paid $10,000 per month before deductions, such as taxes. From January 2020, all salaried employees who earn less than $684 per week ($35,568 per year) must be classed as nonexempt.  Flexibility Hourly workers generally have more flexibility than salaried employees, who are required to work a set number of hours per week, every week.  Job security Given that both salary nonexempt and hourly workers are compensated for working overtime, the main difference between their statuses is, in fact, in the job security level. If you have a salary, your job is likely to be more secure. If you’re an hourly worker, employers can reduce your hours relatively easily. Pros and Cons of a Salary Are you considering making a switch from hourly pay to a salary? If so, you should know that, in addition to the benefits of a salary, this type of pay also has some disadvantages. Pros of a Salary Regular payments: With a salary, you know how much you’re going to earn every month. Employee benefits: Most salaried employees have access to a benefits package, which may include health insurance and sick days, for example. Job security: Salaried employees enjoy better job security. They are guaranteed a set number of hours and receive fixed payments for their work. Career opportunities: If you have a salary, you may find that you have better opportunities to progress within the company than an employee with an hourly rate.  Cons of a Salary Overtime: Most salaried employees are exempt, which means they don’t receive overtime wages, even if they work more than their allotted hours. Hourly workers and nonexempt salaried employees are paid for overtime at a rate of 150% for every additional hour over the standard 40 hours per week.  Less flexibility: Salaried employees have to stick to a schedule and are required to work a set number of hours per week. Hourly workers are likely to enjoy greater flexibility.  Holidays and leave: Some salaried employees may be limited in terms of when they can take paid holiday or time off compared to hourly workers. There is less autonomy when you’re a salaried employee.  Work-life balance: Maintaining a healthy work-life balance can be difficult if you work long hours. If you have a salary and work set hours, you may also find it harder to switch off and separate your work and personal lives.  Pros and Cons of Hourly Pay Just as there are advantages and drawbacks of having a salary, hourly pay has its pros and cons. Pros of Hourly Pay Flexibility: Hourly work often offers greater control over your schedule and more flexibility than a salaried role.  Overtime wages: Hourly workers are classed as nonexempt, which means entitled to overtime wages. Hourly workers will receive time and a half for every hour they work over 40 hours in a single week.  Work-life balance: Hourly workers may find it easier to separate their work and personal lives and find a healthy work-life balance.  Control: People who have an hourly rate usually have more control over their schedules and when they take time off than salaried employees.  Time for other interests: Some hourly workers may not work as much as salaried employees. This means that they have time for other interests and activities.  Cons of Hourly Pay Fluctuations in earnings: Salaried employees know how much they’ll get paid every week or month. With an hourly rate, there’s less certainty as income can fluctuate. Some people may have months or prolonged periods when they work more or less than usual, and their income may rise and fall.  Lack of stability: Job security can be an issue for employees on hourly pay, as employers can reduce their hours more easily.  Benefits: Salaried employees usually have access to better benefits than hourly workers. If you’re on an hourly rate, you may have to fund your own healthcare insurance and forgo pay if you want to take holiday days, for example.  Hourly Wage vs. Salary: Which Is Better? When looking for a job and analyzing various options, it’s important to think about what would suit you best. Here are some factors to consider: Your hourly rate: If you have a very high hourly rate and your skills are in demand, you could earn a lot more by being an hourly worker than a salaried employee. Overtime: If you have worked long hours without compensation before, you may be reluctant to do it again. If this is the case, you may wish to opt for hourly work or look for salary nonexempt positions.  Benefits: For many employees, benefits are an important draw when choosing a job or a company to work for. It’s worth noting that salaried employees usually have access to better benefits packages.  Flexibility: Some people want to find more flexible roles that give them greater control over their schedules, while others prefer the certainty of set hours and fixed earnings.  Job security: Job security is essential for many employees who have bills to pay, a mortgage, and a family to support. Salaried work is often more secure and consistent than hourly work. Financial need: Many people who are looking for a job will need to ensure they earn a certain minimum amount of money per year. However, this may not always be the case. If you’re in a comfortable financial position, or you are only looking for part-time work, hourly work may suit you better.