Revenue fell. Which customers account for the drop?
Before explaining a fall in revenue, measure it: one definition, two periods of equal length, and the change worked out customer by customer.
By Manny Sidhu · Practical guide · Published · Updated
What revenue means here
Ask Alex measures revenue as net invoiced sales in Xero: posted sales invoices minus sales credit notes, both excluding tax, grouped by the date on each document. It is not cash received, profit, or the revenue line in your profit-and-loss report.
Only authorised or paid documents count. Draft, submitted, voided, and deleted invoices and credit notes are left out.
Two periods of the same length
When you ask why revenue fell or how it changed, Ask Alex compares your chosen dates with the period of the same length immediately before them. The two periods never overlap.
The answer first states whether net invoiced sales fell, rose, or stayed the same, by how much, and the total for each period.
An illustrative example
Illustrative example, not customer data: net invoiced sales were A$310,000 this quarter and A$350,000 last quarter, a fall of A$40,000. One customer was A$55,000 lower, two others were A$25,000 higher between them, and the remaining A$10,000 fall was spread across smaller accounts.
Customer by customer
Each customer's change is worked out from the same invoices and credit notes as the totals, so the customer changes add up to the overall change. A credit note counts against the customer it was issued to.
The answer lists up to three of the largest decreases and up to three of the largest increases. The receipt holds the change for every customer.
If any invoice or credit note in either period has no verified customer, Ask Alex says it cannot reliably rank customers instead of leaving part of the change unexplained.
What the comparison cannot tell you
The customer changes explain the arithmetic of the difference. They do not show why a customer bought less or more, and Ask Alex does not guess. Comparing against a period other than the one immediately before is not supported yet.
Both periods must be in the same currency; if they are not, the answer stops rather than combining them. If the last day of your range was only partly synced, the answer says so.
What each answer shows
Every Ask Alex answer lists its source, scope, time, assumptions, and calculation, along with the Xero invoices and credit notes behind each figure. The totals and customer changes are calculated by code from those records.