revenue assignment adalah

Pengertian Revenue Management, Manfaat, Strategi dan KPI-nya

Banyak bisnis menghadapi perubahan besar dalam permintaan selama seminggu, sebulan, atau setahun. Hal ini bisa menjadi sangat sulit untuk bisnis dengan pasokan yang tidak menentu dan biaya tetap yang tinggi. Revenue management adalah seni dan ilmu untuk memprediksi perubahan permintaan tersebut dan meresponsnya dengan cara yang memaksimalkan pendapatan bisnis.

Artikel ini menguraikan prinsip-prinsip dasar revenue management beserta strategi dan tips untuk menjadi revenue manager yang baik.

Apa itu Revenue Management?

Revenue management adalah praktik penerapan data dan analitik untuk memprediksi permintaan dan menyesuaikan harga dan dalam beberapa kasus, persyaratan penjualan lainnya.

Hal ini untuk memaksimalkan pendapatan dari inventaris / persediaan yang mendasari bisnis.

Revenue management disebut sebagai seni dan ilmu pengetahuan tentang “menjual produk yang tepat kepada pelanggan yang tepat dengan harga yang tepat”.

Beberapa definisi menyertakan kualifikasi tambahan – seperti “pada waktu yang tepat” atau “melalui saluran yang tepat” – tetapi premis intinya sama: memvariasikan cara Anda menjual produk atau layanan untuk memenuhi kebutuhan pembeli pasar yang terus berubah.

Revenue management lebih dari sekadar menentukan harga yang akan dikenakan.

Dengan revenue management, harga yang tepat sering kali lebih merupakan fungsi dari kebutuhan pelanggan potensial daripada keekonomisan produk.

Jadi, misalnya, bisnis yang menerapkan penetapan harga cost-plus (menambahkan margin yang konsisten pada biaya produksi produk) mungkin tidak memerlukan proses secanggih revenue management.

Industri dengan biaya tetap yang tinggi dan biaya marjinal yang rendah adalah pengguna revenue management yang paling umum.

Industri ini cenderung berada di sektor perjalanan dan perhotelan: Hotel, maskapai penerbangan, dan agen penyewaan mobil adalah beberapa contoh bisnis yang sangat memanfaatkan revenue management untuk menetapkan harga dan persyaratan penjualan lainnya.

Baca juga: QRIS Adalah: Manfaat, Fungsi, Tujuan, dan Cara Pemakaiannya

Lebih jauh tentang revenue management

Dalam praktiknya, kesuksesan dalam revenue management adalah tentang mengumpulkan dan menganalisis informasi berkualitas tinggi.

Pemilik bisnis yang baik harus memiliki informasi terperinci tentang penawaran, pelanggan, kalender, dan pasar yang kompetitif.

Mengetahui penawaran Anda tidak hanya berarti pada penjualan dan persediaan Anda, tetapi juga apa yang dapat Anda lakukan dengannya.

Misalnya, sebuah kamar hotel dapat dijual dengan sendirinya, sebagai bagian dari masa inap yang lebih lama atau sebagai bagian dari blok kamar untuk konferensi atau pernikahan.

Mengetahui pelanggan Anda sangat penting untuk memprediksi permintaan, termasuk beberapa aspek permintaan yang berbeda.

Misalnya jika Anda adalah seorang pemilik bisnis perholtelan, Anda harus mengetahui bahwa wisatawan bisnis berbeda dengan pelancong rekreasi dan akan merespons secara berbeda terhadap promosi, acara, musim, dan bahkan hari dalam seminggu.

Kebijaksanaan konvensional menunjukkan bahwa pelancong rekreasi memesan lebih jauh sebelumnya daripada wisatawan bisnis, meskipun tentu saja ada pelancong rekreasi spontan yang mencari penawaran di menit-menit terakhir.

Hal itu langsung berimbas pada pengetahuan tentang kalender. Jika sebuah hotel terutama melayani pelancong bisnis, permintaan mungkin lebih tinggi selama seminggu, tetapi resor pantai mungkin melihat permintaan yang lebih tinggi pada akhir pekan.

Resort tepi pantai yang sama mungkin melihat permintaan yang lebih tinggi di musim liburan daripada musim sekolah, tetapi kemudian permintaan yang tinggi, sekali lagi, di sekitar hari libur.

Semua faktor ini berinteraksi: Misalnya, seperti apa permintaan pada akhir pekan liburan musim liburan? Acara yang jarang dan tidak teratur juga penting.

Acara kalender seperti itu dapat menciptakan perubahan permintaan yang liar, bersama dengan peluang halus untuk menarik jenis pelanggan tertentu.

Dalam hal ini, pertanyaan kuncinya adalah: Apa yang dapat Anda tawarkan untuk menarik tipe pelanggan tersebut dan bagaimana Anda dapat beriklan untuk menjangkau mereka lebih baik daripada pesaing?

Hal ini akan mengarah pada mengetahui pasar Anda.

Langkah pertama untuk mengetahui pasar Anda adalah mengetahui pesaing Anda dan “pembanding” – pengganti yang ada untuk apa yang Anda jual (misalnya, sebuah hotel perlu mengetahui hotel-hotel lain, namun juga dapat mengawasi penyewaan rumah jangka pendek atau tempat perkemahan lokal).

Pembanding mana yang relevan ditentukan oleh preferensi pelanggan. Langkah selanjutnya adalah mengumpulkan informasi harga untuk “comps” (singkatan dari pembanding, pesaing, atau keduanya).

Kemungkinannya adalah harga tersedia secara online. Terkadang Anda akan menggunakan harga pesaing secara taktis – dapatkah Anda melemahkan pesaing dekat atau membenarkan harga premium?

Terkadang harga pesaing dapat membantu Anda menghindari kesalahan. Misalnya, jika semua orang mengenakan tarif tiga kali lipat dari tarif Anda, Anda mungkin melewatkan sebuah acara di kalender.

Memiliki semua informasi ini tidak hanya membantu menetapkan harga, tetapi juga dapat membantu menetapkan batasan.

Sebagai contoh, manajer yang terampil mungkin tidak ingin menjual semua kamar hotel sebelum acara akhir pekan yang besar karena pengalaman menunjukkan bahwa beberapa tamu akan bersedia membayar lebih mahal pada menit terakhir.

Atau resor pantai yang menjual kamar selama tiga hari selama akhir pekan yang populer mungkin tidak ingin menawarkan malam tengah untuk menginap satu malam, karena akan lebih sulit untuk mengisi kamar tersebut pada dua malam lainnya.

Sebagai alternatif, resort dapat menaikkan harga menginap satu malam untuk menyesuaikan dengan risiko kamar kosong pada malam yang populer.

Baca juga: Pengertian Inbound dan Outbound Logistik Beserta Perbedaanya

Mengapa Revenue Management Penting?

Revenue management membantu bisnis mendapatkan hasil maksimal dari apa yang harus mereka jual, menawarkan penawaran khusus kepada pelanggan yang paling menghargai mereka dan memanfaatkan peluang dengan cara yang tidak bisa dilakukan oleh penetapan harga tetap.

Namun, lebih dari itu, beberapa bisnis bahkan tidak akan ada tanpa revenue management.

Revenue management dapat menjadi faktor penentu yang memungkinkan bisnis menawarkan produk kepada pelanggan.

Ambil contoh, sebuah hotel di tempat yang populer di akhir pekan. Selama seminggu, hotel ini hanya dapat mengenakan biaya 100.000 per malam jika ingin mengisi kamar.

Di akhir pekan, hotel tersebut dapat mengenakan biaya 300.000 per malam. Tanpa revenue management, harga kamar 100.000 per malam akan menghasilkan 700.000 per minggu dengan asumsi kamar terisi setiap malam.

Harga kamar 300.000 per malam akan menghasilkan 600.000 per minggu, membiarkan kamar kosong hampir setiap malam.

Sekarang, jika hotel membutuhkan kamar untuk menghasilkan 800.000 per minggu untuk beroperasi, hotel tersebut tidak dapat bertahan dalam bisnis.

Namun dengan revenue management, hotel dapat menghasilkan 1.100.000 per minggu dari kamar tersebut dengan mengenakan biaya 100.000 pada lima malam hari kerja dan 300.000 pada Jumat dan Sabtu malam.

Logika tersebut berlaku untuk bisnis apa pun dengan biaya tetap yang tinggi dan biaya variabel yang rendah.

Untuk bisnis seperti itu, beroperasi sama sekali memang mahal, tetapi melayani pelanggan tambahan ketika kapasitas tersedia menjadi sangat murah.

Baca juga: Exit Strategy dalam Bisnis: Manfaat, Jenis, dan Strateginya

5 Langkah dalam Menerapkan Revenue Management

Saat melakukan pendekatan revenue management, akan sangat membantu jika Anda memiliki proses yang tersistem.

Dalam praktiknya, lima langkah yang dijelaskan di bawah ini dapat dilakukan secara berkelanjutan dan bersamaan, tetapi memiliki perkembangan yang jelas yang membawa Anda dari mengumpulkan informasi hingga mengambil keputusan adalah hal yang membuat revenue management dapat dikelola dengan baik.

1. Mengumpulkan informasi (pengumpulan data)

Pada langkah ini, Anda perlu mengumpulkan sebanyak mungkin informasi yang relevan.

Sebaiknya Anda fokus pada empat area utama berikut ini, meskipun bukan berarti informasi yang relevan tidak ada di luar kerangka kerja ini.

Ketahui penawaran Anda

Apa yang Anda jual? Dengan cara apa Anda dapat menjualnya?

Kenali pelanggan Anda

Hal ini mencakup pelanggan tetap dan pelanggan potensial. Siapa yang ingin Anda jangkau? Apa yang Anda ketahui tentang mereka?

Kenali kalender Anda

Setiap musim, setiap minggu, setiap akhir pekan, dan bahkan setiap hari dapat dianggap sebagai pasar mikro tersendiri.

Kenali pasar Anda

Kumpulkan informasi yang cukup tentang pesaing dan pembanding (pengganti) untuk mengetahui seluruh pilihan pelanggan potensial Anda – bukan hanya seperti apa penawaran Anda bagi mereka.

Ketahui history bisnis Anda

Apa yang Anda ketahui tentang history dari semua hal di atas? Bagaimana biasanya keadaan pada hari/bulan/acara tertentu?

Apa yang dapat Anda pelajari dari pengalaman masa lalu? Apa yang biasa dilakukan pelanggan Anda?

Strategi apa yang berhasil dan tidak berhasil di masa lalu, dan apakah Anda tahu alasannya?

2. Melakukan segmentasi

Setelah langkah 1, Anda memiliki banyak data yang dapat dibagi dalam 1.000 cara berbeda.

Pertanyaannya bukan tentang cara mana yang “benar” untuk melakukannya, tetapi apa saja cara yang berguna untuk mempartisi data?

Jika Anda tahu bahwa pelanggan yang membeli di menit-menit terakhir tidak terlalu peduli dengan harga, pada hari tertentu Anda bisa membagi penawaran Anda berdasarkan waktu, dengan harga yang lebih tinggi untuk tanggal yang lebih dekat.

Baca juga: Pendapatan Marginal (Marginal Revenue) Adalah: Ini Pembahasan Lengkapnya

3. Melakukan forecasting

Dengan menggunakan data yang baru dikumpulkan, ketepatan yang diperoleh melalui segmentasi yang berguna dan data historis, Anda dapat mulai meramalkan permintaan dari waktu ke waktu dan berdasarkan jenis pelanggan.

Terkadang ini merupakan proses sederhana yang melibatkan data dasar (misalnya, bagaimana keadaan akhir-akhir ini atau apa yang terjadi pada waktu yang sama tahun lalu) ditambah dengan penyesuaian berdasarkan pembelajaran baru.

Namun, forecasting juga bisa serumit yang Anda bayangkan – terkadang ini adalah proses komputasi otomatis menggunakan teknik regresi pada data deret waktu dengan efek yang memengaruhi pengumpulan data Anda.

Kuncinya adalah memastikan manfaat tambahan dari model yang lebih rinci dan canggih sepadan dengan upaya yang diperlukan untuk menghasilkannya.

Salah satu sumber data masukan yang berguna untuk forecasting Anda adalah output dari prakiraan lain.

Prakiraan tentang cuaca, perilaku konsumen, dan tren ekonomi secara umum dapat berguna dalam menentukan bagaimana industri Anda secara keseluruhan akan mengalami perubahan dan, dari sana, bagaimana hal tersebut akan berdampak pada posisi kompetitif Anda.

Seperti halnya semua proses forecasting, ingatlah: garbage in, garbage out. Tidak peduli seberapa canggih dan hebatnya model forecasting, jika informasi yang dimasukkan ke dalamnya berkualitas rendah dan tidak dapat diandalkan, perkiraan yang dihasilkan juga tidak akan dapat diandalkan.

Baca juga: Perilaku Biaya: Pengertian Lengkap, Jenis, dan Cara Menghitungnya

4. Perencanaan dan pelaksanaan (pengambilan keputusan dan optimalisasi)

Forecasting dapat menyoroti apa yang akan dilakukan oleh pelanggan, pesaing, dan industri.

Pada langkah ini, saatnya untuk memutuskan apa yang harus dilakukan oleh bisnis Anda.

Dengan perkiraan terperinci tentang berapa banyak pelanggan dari jenis apa yang akan mempertimbangkan penawaran bisnis Anda pada hari tertentu, Anda dapat menghitung secara matematis respons yang memaksimalkan pendapatan.

Pengoptimalan bisa jadi rumit, namun banyak sistem revenue management menawarkan formula pengoptimalan yang sudah terbukti dan terintegrasi.

Dengan kemampuan ini, pertanyaannya adalah: Haruskah Anda menjalankan strategi memaksimalkan pendapatan yang ditentukan oleh matematika? Jawabannya: Kadang-kadang, tetapi mungkin tidak selalu.

Penting untuk diingat bahwa meskipun perhitungannya sudah terbukti, data dunia nyata yang dimasukkan ke dalam rumus tidak pernah sempurna.

Perkiraan dan pemahaman Anda tentang kurva permintaan adalah tebakan, yang bisa saja salah.

Jadi, alih-alih hanya mencoba memaksimalkan nilai yang diharapkan, Anda juga perlu mengelola penyimpangan dari nilai yang diharapkan tersebut – dengan kata lain, meminimalkan risiko kerugian sambil mengejar beberapa peluang dengan potensi keuntungan yang tinggi, meskipun peluang tersebut tidak dapat diramalkan dengan akurasi yang tinggi.

Ada beberapa pertanyaan penting yang harus diajukan ketika memutuskan seberapa dekat Anda harus mengikuti perkiraan harga yang dioptimalkan.

Pertama, apakah menetapkan harga terlalu tinggi secara substansial lebih atau kurang berisiko daripada menetapkan harga terlalu rendah?

Jika risikonya asimetris – satu arah jauh lebih berisiko daripada yang lain – Anda mungkin ingin menyesuaikan harga untuk berhati-hati.

Kedua, apakah ada informasi penting yang tidak dapat diperhitungkan oleh prakiraan?

Ketiga, adakah pertimbangan jangka panjang yang lebih penting daripada optimalisasi pendapatan jangka pendek?

Sebuah produk mewah mungkin memiliki merek yang harus dilindungi, dan manajer mungkin khawatir bahwa penetapan harga yang terlalu rendah akan mengurangi kemampuan mereka untuk mendapatkan harga premium di masa mendatang.

Dengan waktu dan kekhususan yang cukup, beberapa pertimbangan ekstra ini dapat dimasukkan ke dalam data dan perkiraan, tetapi penilaian manusia masih memiliki peran penting untuk dimainkan bersama dengan optimasi matematis dalam perencanaan dan pelaksanaan strategi revenue management.

Jika ada satu hal yang dapat diambil dari langkah-langkah ini, sekali lagi, semuanya tergantung pada kualitas data.

Aktivitas bisnis yang memberikan informasi berharga tentang pelanggan dan calon pelanggan (misalnya, promosi eksperimental yang tidak dapat Anda perkirakan) mungkin tidak langsung berdampak pada peningkatan pendapatan, namun memiliki potensi untuk mengarahkan masa depan bisnis Anda.

Baca juga: 20 Perusahaan Terbesar di Indonesia Berdasarkan Pendapatannya

5. Iterasi (evaluasi ulang yang dinamis)

Pada kenyataannya, departemen revenue management akan mengulangi semua langkah ini setiap hari.

Pada saat yang sama, mereka akan melihat hasil dari siklus sebelumnya yang masuk. Penting untuk mempelajari apa yang berhasil, apa yang tidak, dan yang paling penting – mengapa.

Terkadang ketika sebuah strategi tidak membuahkan hasil, hal itu disebabkan oleh eksekusi proses yang buruk. Atau mungkin dalam satu minggu, pesaing Anda berhasil mengalahkan Anda.

Namun terkadang hal ini terjadi karena pelanggan telah berubah dan pemahaman lama Anda sudah tidak sesuai lagi.

Ini mungkin merupakan tanda awal bahwa perubahan penting diperlukan di tempat lain dalam bisnis.

Proses revenue management yang baik akan memberikan ruang untuk belajar dan beradaptasi.

KPI dan Metrik dalam Revenue Management

Revenue management memiliki beberapa key performance indicator (KPI) dan metrik keuangan yang umum, namun yang paling penting adalah menemukan KPI yang paling sesuai untuk bisnis dan situasi Anda. ‘

Ini adalah contoh, bukan menu lengkap untuk menyusun dasbor.

Average daily rate

Ini umum digunakan dalam bisnis hotel dan persewaan. Ini average daily rate adalah pendapatan rata-rata per unit per hari.

Ini mengabaikan sumber pendapatan lain dan periode yang tidak disewakan, dan dapat menjadi indikator kekuatan harga dari penawaran inti.

Untuk penyewaan yang tidak disewa per hari, gantikan dengan periode waktu yang sesuai (jam, minggu, dll.).

Tingkat hunian

Ini mengukur seberapa penuh sebuah hotel, meskipun konsep ini dapat digeneralisasi ke bisnis persewaan lainnya, karena secara sederhana, persentase unit yang disewa pada waktu tertentu.

Terkait, okupansi rata-rata adalah ukuran okupansi dari waktu ke waktu, bukan pada satu titik waktu.

Baca juga: Pengertian Pendapatan Diterima di Muka dan Contohnya

RevPAR (revenue per available room)

Ini mungkin merupakan metrik yang paling penting dalam industri hotel, dan menggabungkan dua konsep sebelumnya.

Metrik ini menunjukkan berapa banyak pendapatan yang dihasilkan setiap kamar dan termasuk jumlah kamar yang kosong.

Sekali lagi, Anda dapat menggeneralisasi metrik ini untuk semua bisnis penyewaan, dengan menganggapnya sebagai “pendapatan per unit yang tersedia”.

ARPA (average revenue per account)

KPI ARPA mengambil perspektif yang berbeda dari metrik sebelumnya: KPI ini melihat pendapatan per akun pelanggan, bukan per aset.

Biasanya dihitung sebagai pendapatan berulang bulanan dibagi dengan jumlah akun yang menghasilkan pendapatan tersebut.

Laba per unit

Hal ini muncul dalam berbagai bentuk (laba per kamar, per pesawat, per kendaraan) dan berbagai ukuran laba yang berbeda.

Dalam industri hotel, laba operasional kotor per kamar yang tersedia atau GOPPAR adalah yang paling umum, tetapi mudah diadaptasi ke industri lain.

Banyak bisnis yang menggunakan teknik revenue management memiliki pendapatan tinggi dan biaya tinggi, sehingga hanya berfokus pada sisi pendapatan dapat menyebabkan pandangan yang terlalu optimis.

Baca juga: Cara Buat Jurnal Pengakuan Pendapatan dan Contoh Kasusnya

PRASM (passenger revenue per available seat mile)

Ini adalah KPI revenue management untuk industri penerbangan penumpang.

KPI ini mengambil pendapatan penumpang (mengabaikan pendapatan dari hal-hal seperti kargo dan program loyalitas kartu kredit) dan membaginya dengan jumlah total mil yang ditempuh oleh setiap kursi dalam armada maskapai penerbangan.

Jarak tempuh kursi berkorelasi dengan pembakaran bahan bakar dan waktu di udara (dan oleh karena itu upah yang dibayarkan untuk pekerjaan di udara), dua pendorong biaya terbesar maskapai penerbangan, dan merupakan ukuran yang baik untuk mengukur kapasitas maskapai penerbangan dalam mengantarkan perjalanan kepada pelanggan.

Metrik ini turun ketika kursi terbang kosong, memperhitungkan peluang yang hilang.

Metrik akuntansi dan keuangan lainnya

KPI revenue management juga dapat mencakup berbagai metrik akuntansi standar, seperti total pendapatan dan EBITDA (pendapatan sebelum bunga, pajak, depresiasi, dan amortisasi) .

Tidak semua metrik harus dibuat khusus atau disesuaikan seperti PRASM atau RevPAR.

Strategi Revenue Management

Ketika kebanyakan orang berbicara tentang strategi revenue management, mereka memulai dengan harga.

Namun, terlalu fokus pada harga dapat membuat alat yang sangat berharga tidak digunakan atau tidak terpakai.

Jadi sebelum berfokus pada harga – di bagian selanjutnya – berikut ini adalah beberapa strategi revenue management yang tidak melibatkan perubahan harga:

Kontrol persediaan

Jangan membuat setiap malam kamar, waktu bermain, atau penerbangan tersedia untuk dibeli sekaligus.

Anda bisa menahan beberapa saat Anda mempelajari lebih lanjut tentang pasar mikro untuk hari itu saat hari itu semakin dekat.

Anda juga dapat memblokir inventaris yang cukup untuk pemesanan dalam jumlah besar dengan terus berkoordinasi dengan tim penjualan yang relevan untuk mengetahui kapan akan ada acara besar (seperti pernikahan, konferensi, tamasya perusahaan atau bahkan outing perusahaan).

Kontrol saluran distribusi

Idealnya, setiap pelanggan akan membeli langsung dari situs web Anda. Tetapi dalam perjalanan dan perhotelan, agregator dan pasar telah mengambil sebagian dari basis pelanggan dan, dengan itu, persentase pendapatan.

Baik menjual melalui Traveloka, Trivago, Pegipegi, atau yang lainnya, memikirkan berapa banyak yang akan ditawarkan dan dengan persyaratan apa adalah keputusan yang tidak bisa Anda buat dengan mudah.

Anda tidak ingin menjual melalui layanan yang mengambil komisi dan tidak memiliki inventaris untuk pelanggan di situs web Anda, tetapi Anda juga mungkin tidak ingin mengabaikan peningkatan besar dalam visibilitas yang bisa Anda dapatkan dengan berpartisipasi di platform ini.

Hotel khususnya dikenal karena menawarkan insentif non-harga bagi pelanggan paling setia mereka untuk memesan di situs web mereka atau melalui aplikasi mereka, biasanya melalui insentif program loyalitas (misalnya, Anda tidak dapat memperoleh poin atau menggunakan manfaat status elit jika Anda tidak memesan dengan mereka).

Baca juga: Pengertian Proyeksi Pendapatan, Cara dan Metode Penghitungannya

Kontrol durasi

Ingat contoh sebelumnya tentang resort pantai yang menjual kamar malam selama akhir pekan tiga hari yang populer?

Menjual kamar untuk menginap satu malam dapat mempersulit untuk mengisi kamar tersebut pada dua malam lainnya.

Salah satu cara untuk mengatasi masalah ini adalah dengan mensyaratkan durasi menginap minimum, baik di sekitar acara khusus atau bahkan sepanjang waktu.

Tips dalam Melakukan Revenue Management

Ada banyak sekali artikel yang membahas revenue management dan ini tidak dapat mengajarkan semua hal yang perlu diketahui.

Namun, berikut ini adalah beberapa tips umum untuk membantu Anda sukses dalam revenue management di industri apa pun.

Selalu belajar

Revenue management adalah tentang memanfaatkan informasi yang tersedia.

Tidak ada yang memiliki informasi yang sempurna, dan tidak ada yang memiliki metode yang sempurna untuk memproses informasi tersebut.

Jika informasi dan pengetahuan merupakan keunggulan kompetitif, maka pembelajar tercepat akan menjadi manajer pendapatan terbaik.

Jangan takut untuk bereksperimen

Setiap informasi memiliki nilai, dan terkadang satu-satunya cara untuk mempelajari hal-hal penting tentang pasar adalah dengan mencobanya.

Beberapa juta rupiah yang hilang atau kehilangan hadiah promosi mungkin tidak masalah jika imbalannya adalah mempelajari informasi berharga tentang apa yang diinginkan pelanggan dan bagaimana mereka mengambil keputusan.

Baca juga: Distribusi Pendapatan: Pengertian, Penyebab, Indikator dan Strategi Pemerataan

Berkolaborasi

Jangan bekerja sendirian. Bisnis yang menggunakan revenue management memiliki banyak departemen yang menangani hal-hal seperti penjualan, promosi, retensi, layanan pelanggan, loyalitas, teknologi, operasi, dan lainnya.

Semua bekerja untuk mencapai tujuan yang sama: menghasilkan uang dengan memberikan nilai kepada pelanggan.

Jangan menyimpan pelajaran berharga tentang pelanggan untuk diri Anda sendiri, dan cobalah yang terbaik untuk belajar dari orang lain.

Berpikirlah jangka panjang

Praktik revenue management cenderung mendorong pemikiran jangka pendek. Anda jarang menjual sesuatu lebih dari satu tahun ke depan, dan metrik yang sulit datang setiap hari yang harus Anda tanggapi.

Itu penting. Namun, itu bukanlah segalanya. Jangan lupa untuk berpikir jangka panjang – Anda tidak hanya menetapkan harga, Anda secara kolaboratif membangun bisnis dan merek.

Dorongan untuk memeras setiap rupiah yang ada sangatlah kuat (dan eksplisit di beberapa organisasi), tetapi luangkan waktu sejenak untuk memikirkan bagaimana strategi Anda bekerja dalam jangka panjang.

Kecuali jika bisnis Anda memiliki semacam perlindungan dari kegagalan pasar, seperti monopoli alami, membuat pelanggan senang hampir selalu lebih penting daripada dolar marjinal. Tetaplah melihat ke depan.

Baca juga: Jenis Pendapatan dalam Akuntansi, Metode Pengakuan, dan Jurnalnya

Banyak bisnis menghadapi perubahan besar dalam permintaan selama jangka waktu tertentu seperti mingguan, sebulan atau setahun, dan dunia semakin bervariasi.

Sulit bagi banyak bisnis untuk mempersiapkan dan merespons perubahan dalam kebutuhan pelanggan mereka – dan terkadang perubahan dalam siapa pelanggan mereka.

Software akuntansi yang modern dan memiliki fitur lengkap dapat menjadi alat yang penting untuk memenuhi kebutuhan pelanggan dan menyediakan produk atau layanan yang tepat, dengan harga yang tepat dan waktu yang tepat.

Dengan Kledo misalnya, Anda bisa dengan mudah memantau history keuangan dan membuat forecasting dan penganggaran di masa mendatang dengan data akuntnasi dan keuangan yang lebih akurat.

Tertarik menerapkan revenue management yang lebih baik dalam bisnis? Anda bisa mencoba menggunakan Kledo secara gratis selama 14 hari atau selamanya melalui tautan ini.

• Latest Posts

• 10 Strategi Online Branding Untuk Pemasaran Produk yang Efektif - 6 Juni 2024
• Rumus Menghitung ROI dalam Berbagai Kondisi dan Contoh Kasusnya - 6 Juni 2024
• 10 Rekomendasi Software Akuntansi Keuangan Terbaik 2024 - 5 Juni 2024

Tinggalkan Balasan Batalkan balasan

Alamat email Anda tidak akan dipublikasikan. Ruas yang wajib ditandai *

Simpan nama, email, dan situs web saya pada peramban ini untuk komentar saya berikutnya.

Please enter an answer in digits: 1 × five =

• [ June 21, 2024 ] The Collaborative Action for Childcare Annual Conference 2024 Kenya
• [ June 13, 2024 ] LPSA Expert Working Group on Europe & Central Asia – Open Meeting – June 2024 LPSA Updates
• [ June 12, 2024 ] IADB releases framework for subnational governance and development in Latin America and the Caribbean Community
• [ June 11, 2024 ] Local Government in Albania: A Status Report for 2023 Albania
• [ May 28, 2024 ] Kutaisi Fourth International Forum: Beyond the Horizon/Empowering Second-Tier, Medium-Size, and Small-Size Cities Cities and urban development

3. Revenue Assignments and Local Revenue Administration

3.1 relevance of revenue assignments and own revenue sources.

Although revenue sources are often less decentralized than expenditure responsibilities, tax revenues are an important source of income for subnational governments, accounting for one-third of total subnational government revenue or roughly 3.3 percent of GDP on average (OECD/UCLG 2019: 71, 77). [12] Other (non-tax) own revenue sources such as user charges, fees, and property income, account for another 11 percent of subnational revenue or approximately an additional one percent of GDP. Naturally, the importance of subnational own source revenues, and the breakdown between the different types of own source revenues, vary considerably from one country to another.

3.2 An overview of devolved (local government) revenue assignments and administration

The economics of local taxation under fiscal federalism. Unlike central government taxes (which are generally defined as compulsory payments to the central government for which there is no quid pro quo ), local government taxes in a well-designed intergovernmental fiscal system are more appropriately seen as quasi-user fees for locally-provided services. Indeed, in order to maximize social welfare and improve the allocative efficiency of resources in a decentralized public sector, the goal of local taxation is not to maximize the volume of local revenue collections, but rather, to ensure that local taxpayers in different local jurisdictions only pay local taxes commensurate to the level of locally-provided services that they demand from and get supplied by their local government. [13]

In line with the concept that “finance should follow function,” local taxes and user fees should be considered appropriate funding sources to pay for exclusive local government functions—where the benefits of local government services largely or wholly are received by residents of the local government jurisdiction itself. As noted in Section 3.3 below, to the extent that concurrent functions partially or largely benefit residents outside the local government jurisdiction, it would be conceptually more appropriate to fund such concurrent government functions in part or in whole through intergovernmental fiscal transfers.

Assignment of own revenue sources. Public finance theory prescribes a number of rather stringent conditions to determine which taxes and revenue sources should be considered good candidates for assignment to the local or regional level (Bird 2000). In fact, in line with the subsidiarity principle, the only taxes and revenue sources that could be suitably collected by subnational governments are revenue sources that (a) can be administered efficiently at the local or regional level; (b) are imposed solely or mainly on local residents; [14] and (c) do not raise problems of harmonization or competition between subnational governments or between subnational and national governments. [15]

The only major revenue source usually seen as passing these stringent tests for assignment to the local level is the property tax; the second-largest category of local revenues in many countries tends to be user fees and charges. In fact, for all other high-yielding tax sources—including personal income taxes, corporate income taxes, value-added taxes or sales taxes, and trade taxes—it could reasonably be argued that the central government is the lowest level of government able to collect those revenue sources without causing inefficiency. As a result, it is no surprise that the vast majority of revenues in most countries is collected by the central government.

Tax autonomy and the assignment of shared revenue sources. Because the practical scope for autonomous subnational taxation—in a way that ensures efficiency—is limited, some countries assign local governments the right to collect different revenue sources, while limiting the control of subnational governments over one or more aspects of these taxes. This results in a spectrum ranging from own source revenues fully under the control of local decision-makers to tax sharing arrangements over which local governments have no control (Table 3.1).

Table 3.1 A taxonomy of tax autonomy (OECD)

For instance, central legislation might provide local governments with the power to collect a certain tax – a corporate income tax, for example – while defining the base of this tax uniformly across the entire national territory in order to limit the administrative burden of local taxation on taxpayers. Similarly, central legislation may limit the tax rates that local governments may impose on local taxpayers for different taxes – for example, by setting lower and upper bounds – in order to prevent territorial or vertical tax competition. Alternatively, central authorities may simply decide to share the revenue collected from certain revenue sources with subnational governments. For example, this may be done on a derivation basis (based on where the revenue is collected) without giving subnational governments any control over the tax base, the tax rate, or the sharing rate. [16]

In addition to property taxation, another area of focus for subnational revenue mobilization efforts could be on user charges and fees. The ability of local governments to collect these types of revenues depends considerably on the assignment of functional powers; local institutions’ ability to deliver local services in way that provides value-for-money; and on the capacity and willingness of users to pay for these services.

3.3 An overview of non-devolved revenue assignments

Traditionally, the discussion of revenue decentralization and the assignment of revenue powers has focused almost exclusively on the local property tax and any other local tax and non-tax revenue funds that are part of the local government budget. Virtually no systematic attention has been paid to the assignment of revenue powers to non-devolved actors in the intergovernmental system. This includes any discussion or analysis of revenues collected by national parastatal entities, authorities and funds—revenues collected by entities that are funders or providers of delegated services. Also overlooked are revenues collected by local government-owned public companies, delegated service providers, and other “last mile” providers such as local water utilities, transit companies, or fee-collecting local health facilities. All these revenues are typically excluded from measures of revenue decentralization, as traditional measures of revenue decentralization focus exclusively on national government revenue collections and local government revenue collections. Any revenues collected by off-budget entities at both the central government and local government levels are often simply overlooked. [17]

While the reliance on non-devolved revenue sources is likely to vary significantly from country to country and from sector to sector, these revenues are likely to play a much more significant role than commonly recognized. For instance, in the provision of public health services, how much do local health facilities collect in terms of user fees or private or social health insurance payments in a way that is not captured by local government accounts? In turn, how much revenue do national or local health insurance schemes collect from the public? Similarly, to the extent that schools collect school fees from parents and/or to the extent that school committees or parent-teacher committees, as quasi-public entities, contribute to the provision of primary education, how significant is this funding? [18]

In the provision of water and sanitation services, what is the total revenue collected each year and subsequently spent for recurrent operation and capital purposes by off-budget urban water utilities? Similarly, in rural areas, what revenues are collected by water user committees which, in many countries, serve as the de facto provider of rural water services? Both of these questions should be answered fully to get a comprehensive picture of water and sanitation revenues. It is not unusual, however, for the accounting of water and sanitation revenue and spending to focus exclusively on capital investment spending, and to ignore the revenues and expenditures needed to operate and maintain water and sanitation infrastructure.

Likewise, to the extent that roads and other transportation infrastructure may be operated in an off-budget manner by a national road fund (often funded by a fuel levy) or by dedicated transportation authorities or public-private partnerships (PPPs), what are the fuel levies or road tolls that are collected by these authorities or entities that operate and/or maintain public sector roads or bridges?

3.4 Common obstacles in domestic revenue mobilization and subnational revenue administration: technical challenges

Local own source revenues are seen by many as a preferred source of funding for local government services. This is not only because there is a stronger conceptual link between the benefits and costs of locally-provided services, [19] but also because local taxpayers are expected to exert stronger oversight over the efficient spending of their own local tax contributions. Furthermore, revenue decentralization gives subnational governments a fiscal stake in the economic success of their jurisdictions. As a result of these factors, the failure to decentralize revenue powers while decentralizing expenditure responsibilities is generally assumed to result in greater local fiscal indiscipline and risk taking.

But, the evidence on this point is mixed. Given the fact that the collection of most major revenue sources—with the exception of property taxes—is generally assigned to the central government in line with the subsidiarity principle in revenue administration, virtually every country in the world faces a significant primary vertical fiscal imbalance. In many countries, the assignment of shared revenue sources on a derivation basis, or the introduction of local surtaxes or piggy-back taxes is often able to reduce the vertical fiscal gap in a way that provides resources to subnational governments without the potential inefficiencies associated with full revenue decentralization (Hunter 1977).

Nonetheless, lackluster collection of local taxes and other own source revenues in many local jurisdictions is common, particularly in developing and transition countries. Analyses of local revenue performance frequently attribute the lack of local revenue effort to an amorphous “weak local revenue administration” which, in turn, is often attributed to a “lack of local political will.” Instead, weak local revenue performance is often caused by a combination of factors, including the fact that local governments are assigned unpopular taxes that are relatively costly to collect, and have weak enforcement powers and weak political incentives and/or the absence of hard budget constraints. [20]

As a result, most real-world interventions related to revenue assignment and local revenues are intended to ensure that subnational governments administer the limited revenue instruments assigned to them as efficiently as possible. Efforts to improve local property tax administration (particularly in urban areas), often play on outsized role in development partner interventions related to local government revenues (Kelly, White, and Anand 2020).

3.5 Political economy considerations: common obstacles in revenue assignments

Empowering intergovernmental (fiscal) systems: revenue assignments. Public sector revenues tend to be much less decentralized when compared to public sector expenditures. As noted in Section 2, when we apply the subsidiarity principle to the function of public taxation and revenue administration, most revenues are efficiently collected at the national level. An additional reason for this pattern is that political economy forces cause revenues to be highly centralized. Most Finance Ministers will be hesitant to give away high-yielding revenue instruments to subnational governments, and thereby reduce the ability of the national fiscus to ensure macro-fiscal stability.

Furthermore, it is common for central government politicians—ahead of their next election—to abolish local taxes that are unpopular with the electorate, allowing central politicians to cut taxes for voters without a negative impact on their own (central) budget. More often than not, these local revenue sources are reinstated after the election, when locally elected leaders appeal to the national party that local revenues are an important foundation for the financial survival of local governments.

Efficient, inclusive and responsive revenue assignment. In response to news that local governments are collecting only x percent of the revenue that they could be collecting (where x is a small number, sometimes even as small as 10 percent), it is not unusual for national-level politicians or policy researchers studying local revenue administration to condemn local government officials for lacking the political will to collect own source revenues.

Such criticism may or may not be warranted, and if nothing else, it does not necessarily point to a problem with local tax administration. It is useful to start by acknowledging the political economy argument that local revenue collections are not intended to be maximized, but rather, that local revenue collections are optimal where the marginal cost to local taxpayers of additional taxation equals the marginal benefits from additional public services. In an effectively decentralized system, if the chain of accountability is working, locally elected officials are the arbiters of the level of local taxation at which this optimum is achieved. The “lack of political will” may simply reflect a rational political response to a situation where it might be politically easier for a mayor to get additional resources as a special grant from central government compared to collecting from local constituents. Local leaders may also exhibit a lack of political will to collect own source revenues results if the efficiency or responsiveness of local government spending is relatively low. A low level of lack of political will is only a real concern if local politicians are setting effective tax rates – through a combination of formal tax rates and weak revenue administration and enforcement – that result in a level of local taxation that falls below what is considered optimal by local constituents.

A bigger concern may actually be when predatory local taxation, the opposite of inadequate revenue mobilization, occurs. [21] Another serious problem occurs when the local government administers local taxes and revenues in a patently inequitable manner for example, enforcing taxes on political opponents, but not on political supporters, or when pervasive inefficiency or corruption exists in local tax administration. It is not just local politicians who are to blame at the local level for weak local revenue administration. As long as local politicians and taxpayers are satisfied to remain at an equilibrium of low taxation and low service delivery performance, the tax administration apparatus does not face strong incentives to improve its collection performance. Perhaps unsurprisingly, then, most local revenue mobilization efforts focus on other local administration improvement efforts such as improving land administration and property valuation, while basic revenue collection activities, such as billing systems and enforcement and collection of arrears, are frequently overlooked.

Engaged civil society, citizens, and business community: revenue assignments. While the long term success of any public sector depends on its ability to generate revenues from which to fund public sector expenditure, it is equally important to consider the perspective of the (local) taxpayer in determining the assignment of revenue sources and the optimal level of taxation at different levels. In most countries, even under the best of circumstances, taxpayers are unlikely to pay their (local) taxes if payment can be avoided without negative consequences. Tax collection and enforcement issues aside, local taxpayers’ willingness to pay taxes in return for local public services is likely to be limited if the local government’s decision making is unresponsive, or if the local government’s capacity to efficiently deliver services is weak.

A final political economy consideration regarding local revenue collection is how the money gets spent. Wealthier taxpayers might be willing to pay local taxes if they perceive benefits from higher local taxes. However, the willingness of wealthy taxpayers to support pro-poor local services is often limited by the strength of local social contract. Thus, local revenue compliance may decline over time when local governments pursue redistributive policies beyond the level supported by those contributing most to the local treasury.

[12] According to the OECD definition used, tax revenue is not made up only of own-source taxes, but includes shared taxes as well. Even with this more expansive definition of subnational government tax revenues, subnational taxes account for only 14.9% of public tax revenues. As discussed further below, the main funding source for subnational governments (on average) is formed by intergovernmental fiscal transfers.

[13] In this sense, decentralized provision of locally-provided goods mimics market-provision of private goods, where consumers opt to consume a private good up to the point where the marginal benefit from the good equals the marginal cost. Basic economic analysis (for instance, in the context of a representative agent or median voter model) suggests that in addition to the local governments’ responsiveness to constituent preferences, other key determinants of the optimal level of local taxation include the relative price (i.e., efficiency or inefficiency) of local service provision and the presence or absence of general-purpose grants.

[14] An efficient assignment of revenue sources should prevent the possibility of “tax exporting”, by which a local or regional government is able to impose a tax burden on residents outside its jurisdiction. For this purpose, it is important to recognize that the burden of a tax may be borne by someone other than the person who pays the tax. For instance, while import duties are paid by the importer, the actual burden of the tax is typically borne by the final consumer (because the cost of the import duty raises the final sales price). As such, assigning the power to levy import duties to local governments (or the practice of charging an octroi on the trans-shipment of goods through a local jurisdiction) would effectively allow local government to tax the residents of other local governments without providing commensurate services to them.

[15] Tax competition between different subnational jurisdictions as well as duplicative taxation by different levels (resulting in cumulative high marginal tax rates) would have the potential for economic distortion and inefficiency.

[16] As noted in Section 3.3 below, economists consider that such shared revenues are in fact intergovernmental fiscal transfers. Nonetheless, it is not unusual for the domestic Chart of Accounts to register such shared revenues as own source revenues rather than as intergovernmental revenues in order to give the appearance of tax autonomy.

[17] Compared to other sectors, the health sector offers a positive example, as the World Health Organization’s accounting of Total Health Expenditures seeks to incorporate different funding flows, including public sources (government spending); private (out of pocket) spending; social health insurance; and donor organization spending. Despite the extensive guidance in the sector, however, it is often still difficult to entangle how much is being collected and spent of health services, and, by whom, at the subnational level.

[18] Boex and Vaillancourt (2014) point to the case of education spending in Madagascar. Primary education is formally a central government responsibility provided in a deconcentrated fashion following a classic French model. In 2010‐2011, centrally hired primary school teachers (either as permanent civil servants or contractual employees) accounted for only 32% of all public school teachers; of the remaining 68% (called FRAM teachers), 48% were hired and paid in part by parental committees and in part by a subsidy paid directly to teachers by the central government and 20% were hired/paid by parent’s committees, often with in kind payment (rice).

[19] The link between local taxes and local expenditures and accountability at the local level is called Wicksellian connection. See Bird and Slack (2013).

[20] National revenue authorities don’t necessarily do any better job when asked to collect local revenues (Fjeldstad, Ali, and Katera 2019).

[21] The definition of predatory taxation is often in the eye of the beholder. However, most people would be concerned about the efficiency and equity of local revenue assignments if a major share of local revenues would benefit tax collectors, or if these local revenues are mainly used to pay for the sitting allowance of local officials.

Copyright 2015-2024. Local Public Sector Alliance.

Lembaga Penyelidikan Ekonomi dan Masyarakat – Fakultas Ekonomi dan Bisnis – Universitas Indonesia

• Publikasi Buku

Tulisan ini memfokusan kepada salah satu aspek dari desentralisasi fiskal, meskipun dalam pembahasannya tidak tertutup akan bersinggungan dengan aspek-aspek lainnya, karena merupakan bagian yang tidak terpisahkan.

nMasalah umum yang biasa muncul dari pelaksanaan desentralisasi terutama menyangkut dilema antara stabilitas makroekonomi dan integrasi negara. Perhatian lain diberikan untuk dua komponen utama dari desentralisasi fiskal yaitu: revenue assignments dan intergovernmental transfer, dengan mengacu kepada kedua Undang-undang mengenai otonomi daerah (UU No. 22 dan 25 tahun 1999) dan UU No. 34 tahun 2000 mengenai pajak daerah dan retribusi daerah.

Dilema dalam pelaksanaan desentralisasi terjadi terutama yang berkaitan dengan pelayanan publik dasar,meskipun tetap bisa dilaksanakan dan ditingkatkan kualitasnya, namun pada prakteknya cukup sulit untuk dipenuhi. Hal ini lebih disebabkan bahwa pelaksanaan desentralisasi otonomi daerah bermakna bertambahnya beban kewajiban pemerintah daerah. Pengalihan kewajiban dan fungsi tersebut tidaklah mudah dan membutuhkan waktu yang lama untuk mencapainya. Akan semakin kompleks lagi bila sebagian daerah enggan untuk menerima pelimpahan tugas tersebut. Belum lagi masalah pembagian sumber keuangan yang pemungutannya dapat menjadi pemicu disintegrasi.

Pembahasan dilengkapi dengan uraian mengenai evaluasi sumber penerimaan daerah yang berasal dari penerimaan asli daerah (PAD), beberapa pungutan ?baru? di era otonomi, bagi hasil pajak dan SDA; uraian lainnya adalah mengenai Dana Alokasi Umum (DAK) dan Dana Alokasi Khusus (DAK). Tulisan diakhiri dengan topik otonomi daerah dan dunia usaha, yang menyebutkan berbagai persoalan yang menjadi peluang sekaligus tantangan ini harus bisa dihadapi agar menjadi manfaat ke depan, terutama dalam jangka menengah dan panjang.

Jakarta, 25 Agustus 2003

Robert A. Simanjuntak

Download Document

Publikasi Terbaru

Seri analisa makroekonomi: rapat dewan gubernur bi, juni 2024.

• Juni 21, 2024

Riset LPEM FEB UI: GoTo Berkontribusi Signifikan Dorong 5 Sektor Penting Penggerak PDB Indonesia Tahun 2023

• Juni 5, 2024

Ribut Soal Tapera: Kebijakan “Harga Mati” untuk Turunkan Angka Kekurangan Perumahan Nasional? – Special Report, Juni 2024

• Juni 4, 2024

Seri Analisa Makroekonomi: Inflasi Bulanan, Juni 2024

Publikasi terkait.

• Post Views: 32
• BI Board of Governor Meeting , Brief , Publication

• Post Views: 55
• Newsletters & Press Release , Publication

• Post Views: 309

Contact LPEM

• Masuk/Daftar
• Pajak dan Politik
• Semua Pajak dan Politik
• Semua Berita
• Internasional
• Download Peraturan
• Semua Literasi
• Tips & Trik
• Kelas Pajak
• Resume Putusan
• Profil Daerah
• Profil Negara
• Semua Review
• Semua Komunitas
• Komik & Animasi Pajak
• Data & Alat
• Semua Data & Alat
• Narasi Data
• Tarif Bunga
• Kalkulator PPh Pasal 21
• Perpajakan DDTC
• Peraturan Pajak Pusat
• Putusan Pengadilan Pajak
• Putusan Mahkamah Agung
• Peraturan Pajak Daerah
• UU Perpajakan Konsolidasi
• Persandingan Dokumen
• Semua Fokus
• Semua Reportase

Apa Itu Desentralisasi Fiskal?

SINERGI antara pemerintah pusat dan pemerintah daerah (pemda) sangat dibutuhkan untuk meningkatkan penerimaan pajak, baik pusat maupun daerah. Sinergi tersebut salah satunya dapat dilakukan dengan mengoptimalkan pertukaran dan pemanfaatan data atau informasi perpajakan.

Pasalnya, data dan informasi mengemban peranan penting dalam  optimalisasi penerimaan dan pengawasan kepatuhan pajak . Untuk itu, Ditjen Pajak (DJP) menandatangani perjanjian kerja sama (PKS) dengan Ditjen Perimbangan Keuangan (DJPK) dan 169 pemda. Simak “ Bila DJP Menandatangani MoU dengan Pemda ”

Melalui  perjanjian tersebut , DJP akan menerima sumber data pengawasan antara lain data kepemilikan dan omzet usaha, izin mendirikan bangunan, usaha pariwisata, usaha pertambangan, usaha perikanan dan perkebunan. Sebaliknya, pemda akan menerima data DJP untuk kepentingan pengawasan daerah.

Adapun apabila berbicara mengenai pajak daerah maka sangat berkaitan erat dengan otonomi daerah dan desentralisasi fiskal. Hal ini lantaran kewenangan daerah dalam memungut pajak merupakan bagian dari desentralisasi fiskal dan salah satu wujud pelaksanaan otonomi daerah. Lantas, apa itu desentralisasi fiskal?

Definisi PENERAPAN otonomi dan desentralisasi fiskal ditandai dengan diberlakukannya Undang-Undang (UU) No. 22 Tahun 1999 dan UU No. 25 Tahun 1999. Namun, kedua regulasi itu sudah mengalami beberapa kali revisi hingga yang terakhir dengan UU No.32 Tahun 2004 dan UU No.33 Tahun 2004.

Mengacu Pasal 1 angka 7 UU No. 32 Tahun 2004, desentralisasi diartikan sebagai penyerahan wewenang pemerintahan oleh pemerintah (pusat) kepada daerah otonom untuk mengatur dan mengurus urusan pemerintahan dalam sistem Negara Kesatuan Republik Indonesia.

Sejalan dengan desentralisasi tersebut, aspek pembiayaan juga ikut terdesentralisasi. Implikasinya, daerah dituntut untuk dapat membiayai sendiri biaya pembangunanya (Prawoto, 2015).  Maka dari itu, pelimpahan tugas kepada pemda dalam otonomi harus disertai dengan pelimpahan keuangan ( money follow functions ) (Hastuti, 2018).

Untuk itu, salah satu wujud pelaksanaan otonomi daerah adalah otonomi dalam aspek pengelolaan keuangan daerah yang disebut otonomi fiskal atau desentralisasi fiskal. Bahl (2009) mendefinisikan desentralisasi fiskal sebagai pemberdayaan masyarakat melalui pemberdayaan fiskal pemda.

Menurut, Nižňanský, Mikloš, dan Žárska (1998) desentralisasi fiskal adalah penetapan batasan untuk pengambilan keputusan di tingkat sub-pusat dengan memperkuat kekuasaan dan tanggung jawab administrasi publik tingkat bawah dalam menyediakan dan mendanai barang publik.

Sementara itu, Slinko (2002) mengartikan desentralisasi fiskal sebagai pelimpahan tanggung jawab fiskal dari pemerintah pusat kepada pemda, termasuk di dalamnya menyerahkan otoritas bagi pemda untuk penerimaan dan pengeluaran daerahnya.

Secara lebih luas, Prawirosetoto (2002) menyatakan desentralisasi fiskal adalah pendelegasian tanggung jawab dan kewenangan untuk pengambilan keputusan di bidang fiskal yang meliputi aspek penerimaan ( tax assignment ) maupun aspek pengeluaran ( expenditure assignment ).

Adapun fiskal merupakan istilah yang merujuk pada pendapatan publik, keuangan publik, perbendaharaan atau penerimaan publik, termasuk semua peraturan perpajakan yang menjadi dasar pendapatan publik dihimpun (IBFD,2015). Dengan demikian, singkatnya fiskal berkenaan dengan urusan pajak atau pendapatan negara (KBBI).

Simpulan INTINYA otonomi daerah mempunyai tujuan meningkatkan pelayanan publik dan mewujudkan kesejahteraan masyarakat melalui penyerahan sebagian urusan pemerintahan kepada daerah. Otonomi daerah salah satunya diwujudkan dengan desentralisasi fiskal.

Secara ringkas, desentralisasi fiskal berarti penyerahan kewenangan fiskal dari pemerintah pusat kepada pemerintahan daerah. Adapun fiskal berarti berkenaan dengan urusan pajak atau pendapatan publik. Hal ini berarti dengan desentralisasi fiskal pemda berwenang mengatur keuangan daerahnya sendiri termasuk memungut pajak. (Bsi)

Kanal Glosarium Perpajakan DDTC Kini Gratis dan Tanpa Daftar Akun

5 Elemen Umum dalam Mendefinisikan Pajak

Asal Mula Kata Pajak, dari Pajeg pada Era Kerajaan Mataram Islam

Tata Cara Penilaian untuk Tujuan Pajak Diatur di PMK, Ini Kata DJP

Apa itu standar akuntansi keuangan entitas privat (sak ep), cara mutakhirkan nik di sim pajak daerah agar bebas 100% pbb jakarta, menilik kontroversi tax expenditure dalam reformasi pajak, apa itu kantor akuntan publik (kap), apa itu 4 pilar sak di indonesia, apa itu reekspor atau ekspor kembali.

Expenditure and Revenue Assignment: Principles

• First Online: 06 September 2019

Cite this chapter

• Harry Kitchen 4 ,
• Melville McMillan 5 &
• Anwar Shah 6  

589 Accesses

1 Citations

This chapter provides a conceptual overview of the principles of expenditure and revenue assignment to local governments. Local government is seen to be more aware of local preferences and conditions and more accountable to local residents than senior governments. Core and noncore responsibilities are distinguished (e.g., local streets versus schooling). Financing follows function. Financing follows the benefit criterion; that is, local residents pay for the local services from which they benefit—with user charges and local taxes although grants may be needed. Various (especially) noncore services involve interjurisdictional spillovers and/or redistributive considerations and so, if assigned to local governments require intergovernmental transfers to achieve efficiency and equity objectives. Financing alternatives and appropriate uses are reviewed.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save.

• Get 10 units per month
• Download Article/Chapter or Ebook
• 1 Unit = 1 Article or 1 Chapter
• Cancel anytime
• Available as PDF
• Read on any device
• Instant download
• Own it forever
• Available as EPUB and PDF
• Compact, lightweight edition
• Dispatched in 3 to 5 business days
• Free shipping worldwide - see info
• Durable hardcover edition

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

The vast number of references found in Bahl and Bird ( 2018 ) and Boadway and Shah ( 2009 ), two books providing comprehensive examinations of fiscal federalism and decentralization, illustrate the growth and extent of the literature. Earlier valuable contributions include those by Bahl and Linn ( 1992 ), Bird et al. ( 1995 ), Litvack et al. ( 1998 ), Manor ( 1999 ), McLure ( 1983 , 1999 ), OECD ( 1987 , 1997 , 1999 ), Owens and Norregaard ( 1991 ), Shah ( 1991 , 1994 ), and Ter-Minassian ( 1997 ).

A resulting additional argument for decentralization is that it enhances political participation. Greater responsiveness, accountability, and enhanced participation have long been seen as advantages of decentralization in the political literature. Other widely noted potential positive features of local government are greater transparency of government to local residents and, of course, greater autonomy. Shah ( 2014 ) advocates for movements toward FAIR (fair, accountable, incorruptible, and responsive) local governance and outlines a framework for evaluation. Blending these desirable characteristics with the economics of fiscal federalism has created a powerful case for decentralization and a more valuable tool for the analysis of decentralized government.

Besley and Coate ( 2003 ) have extended the theory underlying the conventional arguments for decentralization. Their more general model assumes cost sharing of centrally provided outputs under a nationally uniform tax system, allows for non-uniform central provision across localities, locally elected representation to the central government, cooperative and non-cooperative legislative decision-making, varying degrees of heterogeneity in local tastes, and varying interjurisdictional spillovers. Heterogeneity of tastes and the degree of spillovers are central to the centralization-decentralization choice with less heterogeneity and more spillover favoring centralization. However, the case for decentralization is surprisingly strong and prevails even when tastes are uniform and spillovers significant. Also see Ingram and Hong ( 2008 , 17–108).

Critical assessments of fiscal federalism and, particularly, decentralization have emerged—motivated in part by difficulties experienced within some countries. Oates ( 2005 ) characterized those as an emerging second-generation of fiscal federalism. He categorized the second-generation literature (notably in Oates 2008 ) as having two strands. The first strand applies a broader range of economic modeling (i.e., beyond the more conventional public finance) to the questions of fiscal federalism while the second strand evolved from public choice with a focus on political institutions. Both address problems with decentralization that have or might occur. A dominant concern is the problems that emerge with soft (rather than hard) budget constraints on decentralized governments. Essentially, the second-generation literature focuses on problems that can arise when there are flaws in the decentralization design. Surveys of the impacts of decentralization generate mixed results but do point to the importance of good design and implementation (e.g., see Bahl and Bird 2018 , Chapter 2). Also, there is some evidence that better-quality government enhances personal well-being (Helliwell and Huang 2008 ; Helliwell et al. 2018 ) and, though somewhat mixed and deserving of more detailed analysis, that decentralization can also increase well-being/life satisfaction (e.g., Bjornskov et al. 2008 ; Diaz-Serrano and Rodriguez-Pose 2012 ; Gao et al. 2014 ; Tomaney et al. 2011 ). Closely related is a literature on measuring the decentralization of government (e.g., Ivanyna and Shah 2014 ; Hooghe et al. 2010 , 2016 ; Hooghe and Marks 2016 ). The OECD provides valuable recent overviews of fiscal federalism and decentralization (e.g., OECD 2013 , 2016 , 2018 ).

It is important to recognize that borrowing is not a substitute for adequate funding. Debt must be repaid and debt-servicing costs met from the borrowing government’s revenues. Borrowing only facilitates financing long-term capital investments, particularly when they are large and irregular.

For example, see Wiesner ( 2003 ) for a discussion of the role of market-based decentralization in Latin America and Dollery and Wallis ( 2001 ) for a more general discussion of competition in the delivery of public services. Oates ( 1999 ) includes a discussion of market-preserving federalism.

See Tresch ( 2015 , Chapters 26 and 27) for a discussion of a redistributional role for local government.

For further discussion of the topics addressed in this section, see, for example, Dollery and Wallis ( 2001 , Ch 2), Fisher ( 1996 , Ch 6), and Oates ( 1972 ).

See a public finance text (e.g., Fisher 1996 ) for details of the ideal allocation of the cost of public goods. The basic idea is that each individual is charged a personal marginal cost equal to that person’s marginal benefit and the ideal level of output exists when, in the case of a pure public good, the sum of all individual marginal benefits equals the marginal cost of the output.

The problem of distinguishing between economics of sharing and economies of scale is that it is often difficult to distinguish between units of output when many individuals benefit from the same unit of output. For example, there could be economies of scale in the operation of an air pollution abatement system (e.g., cost per unit of particulate matter removed decline to some point) but the benefits of the improvement in air quality resulting from some additional abatement (change in output) could be enjoyed by many or few people (economies of sharing).

For insight into and a brief review of empirical economies of scale analyses, see Byrnes and Dollery ( 2002 ).

For discussion and empirical insights, see McMillan et al. ( 1981 ) and McMillan ( 1989 ).

For illustrations of the assignment of responsibilities among multi-tiered governments, see Table 4.1 of Chap. 4 and Shah ( 2006 , Chapter 1).

Even when services are purely local, citizens may prefer having an upper-level government to review certain activities (e.g., water quality, sewerage treatment, refuse disposal) to provide an informed and independent assessment of performance and especially of the less observable aspects.

See Dahlby ( 2001 ) for a “consensus view” of tax assignments. The shift of the payroll tax to the upper tier(s) of government has been prompted as well by its widespread utilization by senior governments to finance earmarked social benefit programs such as unemployment insurance and social security/pensions.

This treatment reflects the usual top-down perspective on tax assignment in that the matter is decided at the center. In some cases, however, tax assignment is a bottom-up decision where federating states decide upon what tax powers the new central authority should have. See Dahlby ( 2001 ).

In the interests of maintaining the advantages of an internal common market (i.e., free trade within the country) the only taxes, if any, on cross-border movements of goods and services should be national levies on foreign trade.

Bird ( 1999 ) argues that the international adoption of national value-added taxes and their revenue importance have contributed to this centralization.

A broader discussion of transfers—beyond the gap-closing role—appears in the latter part of this chapter.

Dahlby ( 2001 ) notes several problems with the “consensus” view. Those are (a) the need to link expenditure and tax decisions, (b) a need to consider expenditure assignment and grant systems, (c) neglect of distributional impacts of subnational government policies, (d) overlooking certain problems of joint occupancy of tax fields, (e) ignoring that some economic shocks calling for stabilization are region specific, and (f) putting little emphasis on administration and compliance costs of alternative tax assignment regimes.

It is important to remember that property taxes, and especially those taxing improvements as well as land, also may not match benefits exactly and, like a local personal income tax, involve some redistribution. On the other hand, a local personalincome tax may match better benefits and costs for a local service such as schooling.

Kitchen and Slack ( 1993 ) found that about 40 percent of municipal government (i.e., nonschooling) expenditure benefited nonresidential property.

Also see Bahl and Bird ( 2018 , pp. 208–211).

When prices for the services of local government enterprises are above the levels consistent with user charges (e.g., utility charges exceed full costs), the difference is effectively a special sales tax on those services.

For those reasons, Bird ( 1999 ) has recommended a more uniform local business value-added tax.

Besides the references cited below, the following provide valuable insights into intergovernmental transfers: Bird ( 2000 ), Bird and Smart ( 2002 ), Ebel and Yilmaz ( 2001 ), Martinez-Vazquez and Searle ( 2007 ), Shah ( 1999 , 2004 ), and Shah and Thompson ( 2004 ).

At the local government level, however, fiscal disadvantages may be offset in part through capitalization into property values.

Bird ( 1993 ) offers an additional rationale for conditional matching grants. Conditional matching funding can induce local governments to spend some of their own funds on the grantor’s priorities (e.g., achieving minimum standards or greater uniformity of local services) thus stretching the grantor’s budget. While a legitimate perspective, the basis for the mutual interest is in some shared or spillover benefits. Gramlich ( 1977 ) classifies conditional transfers aimed at such grantor policy objectives as also blending the advantages of centralized finance and decentralized supply as having a political-institutional justification. However, because those grants have an efficiency basis, they are distinguished here from the politically motivated grants below.

Bahl, Roy, and Richard M. Bird. 2018. Fiscal Decentralization and Local Finance in Developing Countries . Northampton, MA: Edward Elgar Publishing.

Book   Google Scholar  

Bahl, Roy W., and Johannes F. Linn. 1992. Urban Public Finance in Developing Countries . New York: Oxford University Press.

Google Scholar  

Besley, Timothy, and Stephen Coate. 2003. Centralized versus Decentralized Provision of Local Public Goods: A Political Economy Approach. Journal of Public Economics 87 (12): 2611–2637.

Article   Google Scholar  

Bird, Richard M. 1993. Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization. National Tax Journal 46 (2): 207–227.

———. 1999. Rethinking Subnational Taxes: A New Look at Tax Assignment . IMF Working Paper 165, International Monetary Fund, December.

———. 2000. Intergovernmental Fiscal Relations: Universal Principles, Local Applications . Working Paper 00-02, International Studies Program, School of Policy Studies, Georgia State University, April.

Bird, Richard M., and Michael Smart. 2002. Intergovernmental Fiscal Transfers: Some Lessons for International Experience. World Development 30 (6): 899–912.

Bird, Richard M., and Francois Vaillancourt, eds. 1998. Fiscal Decentralization in Developing Countries . Cambridge: Cambridge University Press.

Bird, Richard M., Robert D. Ebel, and Christine I. Wallich, eds. 1995. Decentralization of the Socialist State: Intergovernmental Finance in Transition Countries . Washington, DC: The World Bank.

Bjornskov, Christian, Axel Drehe, and Justina A.V. Fischer. 2008. On Decentralization and Life Satisfaction. Economics Letters 99 (1): 147–151.

Boadway, Robin, and Frank Flatters. 1982. Efficiency and Equalization Payments in a Federal System of Government: Synthesis and Extension of Recent Results. Canadian Journal of Economics 15 (4): 613–633.

Boadway, Robin, and Anwar Shah. 2009. Fiscal Federalism: Principles and Practice of Multiorder Governance . New York: Cambridge University Press.

Burki, Shahid Javed, Guillermo E. Perry, and William R. Dillinger. 1999. Beyond the Center: Decentralizing the State. In World Bank Latin American and Caribbean Studies . Washington, DC: The World Bank.

Byrnes, Joel, and Brian Dollery. 2002. Do Economies of Scale Exist in Australian Local Government? A Review of the Recent Evidence. Urban Policy and Research 20 (4): 391–414.

Council of Europe. 1985. European Charter of Local Self-Government . http://conventions.coe.int/treaty/en/Treaties/Html/122.htm .

Dahlby, Bev. 2001. Taxing Choices: Issues in the Assignment of Taxes in Federations . ISSJ 167/2001, UNESCO. Oxford: Blackwell Publishers.

Dethier, Jean-Jacques, ed. 2000. Governance, Decentralization and Reform in China, India and Russia . Dordrecht: Kluwer Academic Publishers.

Diaz-Serrano, Luis, and Andres Rodriquez-Pose. 2012. Decentralization, Subjective Well-Being, and the Perceptions of Institutions. Kyklos 65 (2): 179–193.

Dollery, Brian E., and Joe L. Wallis. 2001. The Political Economy of Local Government . Cheltenham: Edward Elgar.

Ebel, Robert D., and Serdar Yilmaz. 2001. Concept of Fiscal Decentralization and Worldwide Overview . Paper presented at the Symposium of the Quebec Commission on Fiscal Imbalance, Quebec City, Quebec, September 13–14.

Fisher, Ronald C. 1996. State and Local Public Finance . Chicago, IL: Richard D. Irwin.

Gao, Song, Xiangyi Meng, and Li Zhang. 2014. Fiscal Decentralization and Life Satisfaction: Evidence from Urban China. Social Indicators Research 119 (3): 1177–1194.

Gramlich, Edward M. 1977. Intergovernmental Grants: A Review of the Empirical Literature. In The Political Economy of Fiscal Federalism , ed. W.E. Oates, 219–239. Lexington, MA: Lexington Books.

Helliwell, John F., and Haifang Huang. 2008. How’s Your Government? International Evidence Linking Good Government and Well-Being. British Journal of Political Science 38 (4): 595–619.

Helliwell, John F., Haifang Huang, Shawn Grover, and Shun Wang. 2018. Empirical Linkages Between Good Governance and National Well-Being. Journal of Comparative Economics 46 (4): 1332–1346.

Hooghe, Liesbet, and Gary Marks. 2016. Community, Scale, and Regional Governance: A Postfunctionalist Theory of Governance . Vol. II. Oxford: Oxford University Press.

Hooghe, Liesbet, Gary Marks, and Arjan H. Schakel. 2010. The Rise of Regional Authority . New York: Routledge.

Hooghe, Liesbet, Gary Marks, Arjan H. Schakel, Sandra Chapman Osterkatz, Sara Niedzwiecki, and Sarah Shair-Rosenfield. 2016. Measuring Regional Authority: A Postfunctionalist Theory of Governance . Vol. I. Oxford: Oxford University Press.

Ingram, Gregory K., and Yu-Hung Hong. 2008. Fiscal Decentralization and Land Policies . Cambridge, MA: Lincoln Institute of Land Policy.

Ivanyna, Maksym, and Anwar Shah. 2014. How Close Is Your Government to Its People? Worldwide Indicators on Localization and Decentralization. Economics 8: 1–61. https://doi.org/10.5018/economics-ejournal.ja.2014-3 .

King, David. 1984. Fiscal Tiers: The Economics of Multi-level Government . London: George, Allen and Unwin.

Kitchen, Harry M., and Enid Slack. 1993. Business Property Taxation . Discussion Paper 93-24, Government and Competitiveness Series, Queen’s University, Kingston, ON.

Litvack, Jennie, Junaid Ahmad, and Richard Bird. 1998. Rethinking Decentralization in Developing Countries , PREM Sector Studies Series. Washington, DC: World Bank.

Manor, James. 1999. The Political Economy of Democratic Decentralization . Washington, DC: The World Bank.

Martinez-Vazquez, Jorge, and Bob Searle, eds. 2007. Fiscal Equalization: Challenges in the Design of Intergovernmental Transfers . New York: Springer.

McLure, Charles E., ed. 1983. Tax Assignments in Federal Countries . Canberra: Australian National University Press.

———. 1999. The Assignment Problem: Conceptual and Administrative Considerations in Achieving Subnational Fiscal Autonomy . Washington, DC: The World Bank.

McMillan, Melville L. 1976. Criteria for Jurisdictional Design: Issues in Defining the Scope and Structure of River Basin Authorities and Other Public Decision Making Bodies. Journal of Environmental Economics and Management 3 (1): 46–68.

———. 1989. On Measuring Congestion of Local Public Goods. Journal of Urban Economics 26 (2): 131–137.

McMillan, Melville L., W.R. Wilson, and L.M. Arthur. 1981. The Publicness of Local Public Goods: Evidence from Ontario Municipalities. Canadian Journal of Economics 14 (4): 596–608.

Musgrave, Richard A. 1959. The Theory of Public Finance . New York: McGraw-Hill.

———. 1983. Who Should Tax, Where and What? In Tax Assignments in Federal Countries , ed. C.E. McLure, 2–19. Canberra: Australian National University Press.

Oates, Wallace E. 1972. Fiscal Federalism . New York: Harcourt, Brace Jovanovich.

———. 1993. Fiscal Decentralization and Economic Development. National Tax Journal 46 (2, June): 237–243.

———. 1999. An Essay on Fiscal Federalism. Journal of Economic Literature 27 (3): 1120–1149.

———. 2005. Towards a Second-Generation Theory of Fiscal Federalism. International Tax and Public Finance 12 (4, August): 349–373.

———. 2008. The Evolution of Fiscal Federalism: Theory and Institutions. National Tax Journal 61 (2, June): 313–334.

OECD (Organization for Economic Co-operation and Development). 1987. Managing and Financing Urban Services Growth . Paris: OECD.

———. 1997. Managing Across Levels of Government . Paris: PUMA.

———. 1999. Taxing Powers of State and Local Government . OECD Tax Policy Studies, No. 1, Paris.

———. 2013. Fiscal Federalism 2014: Making Decentralization Work . Paris: OECD Publishing.

———. 2016. Fiscal Federalism 2016: Making Decentralization Work . Paris: OECD Publishing.

———. 2018. Assigning Responsibilities Across Levels of Government . OECD Working Papers on Fiscal Federalism, September. https://www.oecd-ilibrary.org/docserver/f0944eae-en.pdf?expires=1551479356&id=id&accname=guest&checksum=3046DD4B5D67CBCB4DCBCDC89D5ECC8D .

Owens, Jeffrey, and John Norregaard. 1991. The Role of Lower Levels of Government: The Experience of Selected OECD Countries. In Local Government: An International Perspective , ed. Jeffrey Owens and Giorgio Panella, 3–54. Amsterdam: North-Holland.

Rondinelli, Dennis. 1999. What is Decentralization. In Decentralization Briefing Notes , ed. J. Litvack and J. Seddon, 2–5. Washington, DC: World Bank Institute.

Shah, Anwar. 1991. The New Federalism in Brazil . The World Bank Discussion Paper #124, Washington, DC.

———. 1994. The Reform of Intergovernmental Fiscal Relations in Developing and Emerging Market Economies, Policy and Research Series, 23 . Washington, DC: The World Bank.

———. 1999. Intergovernmental Transfers and Grants. In Decentralization Briefing Notes , ed. J. Litvack and J. Seddon, 27–31. Washington, DC: World Bank Institute.

———. 2004. Fiscal Decentralization in Developing and Transition Economies: Progress, Problems and the Promise . World Bank Policy Research Working Paper 3282, The World Bank, Washington DC, April.

———. 2006. A Comparative Institutional Framework for Responsive, Responsible and Accountable Local Governance. In Local Governance in Industrialized Countries , ed. Anwar Shah, 1–40. Washington, DC: The World Bank.

Chapter   Google Scholar  

———. 2014. Responsibility with Accountability: A FAIR governance framework for performance accountability of local governments. Zbornik Radova Ekonomskog Fakulteta u Rijeci 32 (2): 343–377.

Shah, Anwar, and Theresa Thompson. 2004. Implementing Decentralized Local Governance: A Treacherous Road with Potholes, Detours and Road Closures . World Bank Policy Research Paper 3353, The World Bank, Washington DC, June.

Stigler, George. 1957. Tenable Range of Functions of Local Government. In Federal Expenditure Policy for Economic Growth and Stability , ed. Joint Economic Committee, Subcommittee on Fiscal Policy, 213–219. Washington, DC.

Ter-Minassian, Teresa, ed. 1997. Fiscal Federalism in Theory and Practice . Washington, DC: International Monetary Fund.

Tiebout, Charles. 1956. A Pure Theory of Public Expenditures. Journal of Political Economy 64 (5): 416–424.

Tomaney, J., A. Pike, G. Torrisi, V. Tselios, and A. Rodríguez-Pose. 2011. Decentralisation Outcomes: A Review of Evidence and Analysis of International Data . Department for Communities and Local Government. https://blogs.ncl.ac.uk/curds/files/2013/02/DecentralisationReport.pdf .

Tresch, Richard W. 2015. Public Finance: A Normative Theory . 3rd ed. Waltham, MA: Academic Press.

Walsh, Cliff. 1992. Fiscal Federalism: An Overview of Issues and a Discussion of Their Relevance to the European Community . Canberra: Federalism Research Centre Discussion Paper No. 2, The Australian National University.

Wiesner, Eduardo. 2003. Fiscal Federalism in Latin America: From Entitlements to Markets . New York: Inter-American Development Bank.

World Bank. 1994. World Development Report, 1994: Infrastructure for Development . Washington, DC: The World Bank and Oxford University Press.

Download references

Author information

Authors and affiliations.

Department of Economics, Trent University, Peterborough, ON, Canada

Harry Kitchen

University of Alberta, Edmonton, AB, Canada

Melville McMillan

Governance Studies, Brookings Institution, Washington, DC, USA

You can also search for this author in PubMed   Google Scholar

Corresponding author

Correspondence to Harry Kitchen .

Rights and permissions

Reprints and permissions

Copyright information

© 2019 The Author(s)

About this chapter

Kitchen, H., McMillan, M., Shah, A. (2019). Expenditure and Revenue Assignment: Principles. In: Local Public Finance and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-21986-4_2

Download citation

DOI : https://doi.org/10.1007/978-3-030-21986-4_2

Published : 06 September 2019

Publisher Name : Palgrave Macmillan, Cham

Print ISBN : 978-3-030-21985-7

Online ISBN : 978-3-030-21986-4

eBook Packages : Economics and Finance Economics and Finance (R0)

Share this chapter

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Publish with us

Policies and ethics

• Find a journal
• Track your research

• Graphic Design

Advertising

Social media.

• Market Intelligence Indonesia
• infiniLEADS
• Seo Framework
• Website Framework
• Ads Framework
• Content Framework

Home » Business and Marketing » Revenue: Pengertian, Sumber, dan Analisisnya

Revenue: Pengertian, Sumber, dan Analisisnya

Dafa raditya denishtsany.

• Juni 30, 2023
• Business and Marketing

Dalam menentukan seberapa besar keuntungan yang didapat oleh perusahaan, maka penghitungan revenue adalah langkah penting yang harus Anda lakukan. Apa itu revenue ? 

Melalui aritkel ini, bersama-sama kita akan belajar mengenai revenue mulai dari pengertian, sumber, dan analisisnya. Jadi, dengan informasi ini, Anda juga bisa mulai menghitung berapa keuntungan yang tercapai oleh perusahaan.

Pengertian Revenue

Revenue  dapat dipahami ketika Anda sudah mengetahui definisi dan konsepnya dalam konteks bisnis. Berikut penjelasan lengkapnya.

Definisi Revenue

Revenue , juga dikenal sebagai pendapatan, merujuk pada total uang atau nilai yang diterima oleh suatu entitas bisnis dari kegiatan operasionalnya selama periode tertentu. Pendapatan ini dapat berasal dari berbagai sumber, seperti penjualan produk, jasa yang ditawarkan, investasi, royalti, dan lain sebagainya. Revenue adalah salah satu elemen utama dalam laporan keuangan perusahaan dan menjadi tolok ukur kinerja keuangan yang penting.

Konsep Revenue dalam Konteks Bisnis

Dalam konteks bisnis, pendapatan   tidak hanya mencerminkan jumlah uang yang diperoleh, tetapi juga mencerminkan keberhasilan suatu perusahaan dalam menghasilkan pendapatan dari produk atau jasa yang ditawarkan kepada pelanggan. Total pendapatan   juga menggambarkan permintaan pasar terhadap produk atau jasa tersebut, serta efektivitas strategi pemasaran dan penjualan yang diterapkan. Semakin tinggi pendapatannya , semakin besar potensi pertumbuhan dan keuntungan yang dapat dicapai oleh perusahaan.

Baca Juga :  Mengenal Konsep Cash Flow dan Pentingnya dalam Bisnis

Sumber-sumber Revenue

Revenue tentu datang dari berbagai macam sumber. Selain sumber, ada juga faktor-faktor yang memengaruhi jumlah besaran pendapatanya . Mari kita pahami apa saja jenis-jenis sumber pendapatan  serta faktor-faktor yang memengaruhinya.

Jenis-jenis Sumber Revenue

• Penjualan Produk: Pendapatan utama sebagian besar perusahaan berasal dari penjualan produk atau barang yang dihasilkan. Ini melibatkan proses produksi, distribusi, dan penjualan kepada konsumen atau bisnis lain.
• Jasa: Banyak perusahaan juga menghasilkan pendapatan melalui penawaran jasa. Ini bisa termasuk jasa konsultasi, perawatan, perbaikan, pengiriman, atau layanan profesional lainnya.
• Investasi: Pendapatan dari investasi seperti saham, obligasi, properti, atau investasi keuangan lainnya juga merupakan sumber pendapatan  yang penting bagi beberapa perusahaan.
• Royalti: Jika perusahaan memiliki hak kekayaan intelektual, seperti hak cipta, paten, atau merek dagang, mereka dapat menerima royalti sebagai bagian dari pendapatan mereka ketika hak tersebut digunakan oleh pihak lain.

Faktor-faktor yang Memengaruhi Revenue

Terdapat beberapa faktor yang dapat memengaruhi pendapatan suatu perusahaan:

• Permintaan Pasar: Tingkat permintaan dari konsumen atau pelanggan potensial akan berpengaruh langsung terhadap pendapatannya . Permintaan yang tinggi dapat meningkatkan pendapatan, sedangkan permintaan yang rendah dapat menguranginya.
• Harga: Strategi penetapan harga yang tepat dapat memengaruhi tingkat pendapatannya . Penetapan harga terlalu tinggi dapat mengurangi permintaan, sedangkan penetapan harga terlalu rendah dapat mengurangi pendapatan per unit.
• Kualitas Produk atau Jasa: Kualitas yang baik akan mendukung kepuasan pelanggan, yang pada gilirannya dapat meningkatkan loyalitas pelanggan dan pendapatan jangka panjang.
• Efektivitas Pemasaran dan Penjualan: Strategi pemasaran yang efektif dan tim penjualan yang terampil dapat membantu meningkatkan kesadaran pelanggan, mencapai target pasar yang lebih luas, dan menghasilkan pendapatan yang lebih tinggi.

Baca Juga :  Revenue Stream : Ketahui Arti, Fungsi dan Jenis-Jenisnya!

Pentingnya Revenue

Setiap bisnis pasti membutuhkan pendapatan . Oleh karena itu, peran revenue sangatlah penting. Apa saja peran dan dampak pendapatan  dalam suatu bisnis?

Peran Revenue dalam Keberlanjutan Bisnis

Revenue memainkan peran penting dalam menjaga keberlanjutan bisnis. Dengan pendapatan yang cukup, perusahaan dapat membiayai operasionalnya, mengembangkan produk baru, melakukan inovasi, dan melakukan investasi untuk pertumbuhan jangka panjang. Tanpa revenue yang memadai, perusahaan mungkin mengalami kesulitan keuangan yang dapat menghambat pertumbuhan dan mengancam kelangsungan bisnis secara keseluruhan.

Dampak Revenue terhadap Pertumbuhan dan Keuntungan

Revenue yang meningkat secara konsisten memberikan dorongan bagi pertumbuhan perusahaan. Dengan pendapatan yang lebih tinggi, perusahaan memiliki sumber daya yang lebih besar untuk mengembangkan produk baru, memperluas pangsa pasar, dan melakukan ekspansi geografis. Selain itu, total pendapatan  yang tinggi juga dapat berdampak positif pada keuntungan perusahaan, meningkatkan nilai bagi pemegang saham dan memberikan kesempatan untuk pembagian dividen.

Baca Juga :  Apa Itu Ecommerce? Dapatkan Jenis dan Manfaatnya

Pengukuran Revenue

Revenue dapat diukur dengan menggunakan beberapa metode dan indikator. Anda dapat melihat caranya berikut ini:

Metode Pengukuran Revenue

Terdapat beberapa metode pengukuran pendapatan yang umum digunakan, antara lain:

• Penjualan Bersih: Pendapatan yang terhasilkan setelah adanya potongan, pengembalian barang, dan diskon.
• Pendapatan Bruto: Pendapatan total sebelum terkurangi oleh biaya produksi atau biaya penjualan.
• Pendapatan Operasional: Pendapatan yang terhasilkan dari kegiatan operasional inti perusahaan.

Indikator dan KPI dalam Pengukuran Revenue

Beberapa indikator dan Key Performance Indicator (KPI) yang digunakan dalam pengukuran pendapatan  antara lain:

• Pertumbuhan Pendapatan Tahunan: Persentase kenaikan pendapatan dari tahun sebelumnya.
• Tingkat Konversi Penjualan: Persentase pelanggan yang berhasil terkonversi menjadi pembeli aktif.
• Pendapatan per Pelanggan: Rata-rata pendapatan yang terhasilkan dari setiap pelanggan.
• Pangsa Pasar: Persentase pasar yang terkuasai oleh perusahaan dalam industri atau segmen tertentu.

Strategi Meningkatkan Revenue

Ingin meningkatkan total pendapatan perusahaan Anda? Silakan simak informasi berikut untuk mendapatkan strategi yang tepat dalam meningkatkan pendapatan  perusahaan Anda.

Pendekatan untuk Meningkatkan Revenue

• Segmentasi Pasar: Mengidentifikasi segmen pasar yang potensial dan mengembangkan strategi pemasaran yang sesuai untuk setiap segmen.
• Pengembangan Produk: Mengembangkan produk baru atau meningkatkan produk yang ada untuk memenuhi kebutuhan dan keinginan pelanggan, sehingga dapat menarik lebih banyak pelanggan dan meningkatkan pendapatan.
• Strategi Harga: Menerapkan strategi penetapan harga yang tepat untuk mengoptimalkan pendapatan. Ini dapat meliputi penetapan harga premium untuk produk berkualitas tinggi atau diskon untuk menarik pelanggan baru.

Inovasi dan Diversifikasi sebagai Strategi Revenue

Inovasi dan diversifikasi juga dapat menjadi strategi untuk meningkatkan pendapatan :

• Inovasi: Mengembangkan produk atau jasa baru yang unik, memanfaatkan teknologi terkini, atau menemukan cara baru untuk memenuhi kebutuhan pasar yang belum terpenuhi.
• Diversifikasi: Memperluas jangkauan bisnis dengan memasuki pasar baru, baik melalui ekspansi geografis, akuisisi perusahaan lain, atau pengembangan lini produk yang berbeda.

Analisis Revenue

Setiap perusahaan perlu melakukan analisis yang mendalam terhadap pendapatan  yang mereka dapatkan. Bagaimana caranya?

Analisis Revenue Menurut Segmen atau Produk

Analisis pendapatan berdasarkan segmen atau produk dapat memberikan wawasan yang lebih mendalam tentang kontribusi setiap segmen atau produk terhadap pendapatan total perusahaan. Dengan memahami dengan baik segmen atau produk yang paling menguntungkan, perusahaan dapat mengoptimalkan strategi pemasaran dan alokasi sumber daya untuk mencapai pendapatan  yang lebih tinggi.

Penggunaan Data dan Analitik untuk Mengoptimalkan Revenue

Data dan analitik dapat digunakan untuk menganalisis total pendapatan , mengidentifikasi peluang baru, dan mengoptimalkan strategi pemasaran. Dengan memanfaatkan data yang tersedia, perusahaan dapat mengidentifikasi pola pembelian pelanggan, memahami preferensi pelanggan, dan mengoptimalkan upaya pemasaran untuk meningkatkan pendapatan .

Revenue vs Profit

Masih banyak orang yang beranggapan bahwa revenue dan profit merupakan dua istilah yang sama, padahal dari segi fungsi dan hasil perhitungannya saja sudah terlihat perbedaan yang signifikan. Inilah perbedaan antara pendapatan  dan profit yang perlu Anda pahami.

Perbedaan Konsep dan Pengukuran Revenue dan Profit

Revenue dan profit adalah dua konsep yang berbeda dalam laporan keuangan. Pendapatan merujuk pada pendapatan atau jumlah uang yang terperoleh oleh perusahaan, sedangkan profit merujuk pada keuntungan yang hasilnya setelah adanya pengurangan biaya dan pengeluaran.

Hubungan Antara Revenue dan Profit dalam Bisnis

Revenue merupakan faktor penting yang memengaruhi profit. Namun, profit juga terpengaruhi oleh biaya produksi, biaya operasional, pengeluaran, dan faktor-faktor lainnya. Meskipun pendapatan  yang tinggi dapat mengindikasikan pertumbuhan yang baik, profit yang tinggi juga penting untuk memastikan keberlanjutan bisnis dan pengembangan jangka panjang.

Contoh-contoh Revenue yang Signifikan

Setiap pebisnis harus selalu mendapatkan wawasan baru dan belajar dari mereka yang sudah berhasil dalam meningkatkan pendapatannya . Berikut ini ada beberapa studi kasus dan cerita keberhasilan dari para perusahaan besar dalam meningkatkan pendapatan  mereka yang bisa dijadikan sebagai motivasi bagi Anda dalam menjalankan bisnis saat ini.

Studi Kasus Revenue Tinggi dalam Industri Tertentu

• Apple Inc.: Pendapatan Apple yang signifikan berasal dari penjualan produk seperti iPhone, iPad, dan Mac. Produk inovatif dan strategi pemasaran yang kuat telah membuat Apple menjadi salah satu perusahaan dengan revenue tertinggi di industri teknologi.
• Starbucks Corporation: Pendapatan Starbucks datang dari penjualan minuman kopi, makanan ringan, dan produk-produk lainnya di kedai-kedai mereka. Keberhasilan mereka dalam menciptakan pengalaman pelanggan yang unik dan ekspansi global telah berkontribusi pada pendapatan yang tinggi.

Keberhasilan Revenue dalam Konteks Startup atau Bisnis Baru

• Uber Technologies Inc.: Startup transportasi seperti Uber telah menciptakan model bisnis baru yang menghasilkan pendapatan  yang signifikan. Dengan menyediakan layanan transportasi berbasis aplikasi, Uber telah berhasil menarik pelanggan baru dan menciptakan pendapatan yang besar.
• Airbnb Inc.: Airbnb, sebuah platform online untuk penyewaan tempat tinggal, juga merupakan contoh sukses dalam menghasilkan pendapatan  dalam bisnis baru. Dengan memanfaatkan aset yang ada, seperti rumah atau apartemen yang tidak terpakai, Airbnb telah berhasil menghubungkan pemilik properti dengan penyewa dan menghasilkan pendapatan yang substansial.

Jadi, sudah siapkah Anda untuk meningkatkan pendapatan perusahaan? Ada banyak sekali cara untuk memulai peningkatan pendapatan perusahaan, seperti menyusun strategi pemasaran. Tanpa adanya strategi pemasaran, maka perusahaan Anda tidak akan terkenali oleh masyarakat luas, bukan?

Salah satu strategi pemasaran yang saat ini digunakan oleh setiap perusahaan adalah strategi pemasaran di dunia Digital Marketing seperti melalui website , email , media sosial, dan banyak lagi. Ingin mulai menggunakan strategi pemasaran digital? Anda bisa menghubungi Digital Marketing Agency ToffeeDev untuk menggunakan jasa Digital Marketing kami dan masukilah era baru perusahaan di dalam dunia digital.

Share this post :

Capai Target Pasar Bisnis Anda!

Dapatkan Konsultasi Gratis bersama ToffeeDev!

Related Post

01 Juli 2024

3 Cara Mengolah Data Marketing untuk Meningkatkan Strategi Pemasaran

Primary dan Secondary Data Marketing: Perbedaan dan Manfaat Penggunaannya

Marketing research di social media apa itu pelajari di sini.

5 Cara Mengembangkan Strategi Lead Generation untuk B2B

Newest post.

Strategi Push Notification: Tips Efektif Tingkatkan Interaksi Audiens

[email protected]

+62 82133606010

Business Park Blok E2-3 , Jl.Raya Meruya Ilir No. 88, Jakarta Barat

Our Services

• Digital Marketing
• Market Intelligence
• SEO Community
• Terms & Conditions

Team kami diperlengkapi dengan:

Copyright © 2012 – 2024 | toffeedev.com

Last updated 27/06/24: Online ordering is currently unavailable due to technical issues. We apologise for any delays responding to customers while we resolve this. For further updates please visit our website: https://www.cambridge.org/news-and-insights/technical-incident

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings .

Login Alert

• > Fiscal Federalism
• > Expenditure Assignment

Book contents

• Frontmatter
• PART ONE DESIGNING FISCAL CONSTITUTIONS
• 1 Introduction to Federalism and the Role of Governments in Federal Economies
• 2 The Decentralization of Government Authority
• 3 Expenditure Assignment
• 4 Revenue Assignment
• 5 Natural Resources Ownership and Management in a Federal System
• 6 Local Governance in Theory
• 7 Local Governance in Practice
• PART TWO REVENUE SHARING AND FISCAL TRANSFERS
• PART THREE FINANCE AND PROVISION OF PUBLIC SERVICES
• PART FOUR CHALLENGES AND RESPONSES

3 - Expenditure Assignment

Published online by Cambridge University Press:  05 June 2012

THE CASE FOR DECENTRALIZATION

In Chapter 2, we outlined the general principles of expenditure assignment and discussed in general terms the kinds of responsibilities that could be decentralized to the states. In this chapter, we consider expenditure assignment in more detail. The application of the general principles to specific types of expenditure functions is discussed, as well as some additional problems that arise in coordinating state provision of expenditure programs with national objectives.

It might be worth briefly recalling and summarizing the key arguments for decentralization of expenditures to put the following discussion into context. The following arguments constitute the case for decentralizing expenditure responsibilities. These have also been briefly discussed in earlier chapters.

Catering to Regional Preferences and Needs

The classic argument for decentralization (Oates, 1972) is that different states have different demands for types and levels of public goods and services. This variation may simply come from personal preferences of the residents themselves, perhaps arising from cultural differences or other sources of heterogeneity across states. Or it may come from more objective factors such as geographic differences (e.g., terrain, population density), demographic differences (age structure of the population), or relative price or cost differences.

Access options

Save book to kindle.

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle .

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service .

• Expenditure Assignment
• Robin Boadway , Anwar Shah , The World Bank
• Book: Fiscal Federalism
• Online publication: 05 June 2012
• Chapter DOI: https://doi.org/10.1017/CBO9780511626883.005

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox .

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive .

• Basic Concepts of Revenue

In order to understand markets and economic activities, it is important to have a good grip on the basic concepts of revenue. In this article , we will talk about the basic concepts of revenue and its types.

Suggested Videos

Revenue, in simple words, is the amount that a firm receives from the sale of the output. According to Prof. Dooley, ”  The Revenue of a firm is its sales receipts or income. ‘ In a firm, revenue is of three types:

                                                                                                                                                    Source: Pixabay

Total Revenue

Average revenue, marginal revenue.

Let’s look at each one of them in detail:

This is simple. The Total Revenue of a firm is the amount received from the sale of the output. Therefore, the total revenue depends on the price per unit of output and the number of units sold. Hence, we have

• TR – Total Revenue
• Q – Quantity of sale (units sold)
• P – Price per unit of output

Browse more Topics under Analysis Of Market

• Market and Concept of Markets
• Equilibrium of the Firm
• Total Revenue Approach
• Marginal Revenue Approach
• Perfect Competition
• Equilibrium under Perfect Competiton – I
• Equilibrium under Perfect Competiton – II
• Equilibrium in Monopoly
• Monopolistic Competition
• Equilibrium under Monopolistic Competition

Average Revenue, as the name suggests, is the revenue that a firm earns per unit of output sold. Therefore, you can get the average revenue when you divide the total revenue with the total units sold. Hence, we have,

$$AR =\frac {TR}{Q}$$

• AR – Average Revenue
• Q – Total units sold

Marginal Revenue is the amount of money that a firm receives from the sale of an additional unit. In other words, it is the additional revenue that a firm receives when an additional unit is sold. Hence, we have

MR = TR n  – TR n-1

$$MR =\frac {ΔTR}{ΔQ}$$

• MR – Marginal Revenue
• ΔTR – Change in the Total revenue
• ΔQ – Change in the units sold
• TR n – Total Revenue of n units
• TR n-1 – Total Revenue of n-1 units

MR pertains to a change in TR only on account of the last unit sold. On the other hand, AR is based on all the units that the firm sells. Therefore, even a small change in AR causes a much bigger change in MR. In fact, when AR reduces, MR reduces by a far greater margin.

Similarly, when AR increases, MR increases by a greater extent too. AR and MR are equal only when AR is constant. It is also important to note that the firm does not sell any unit if the TR or AR becomes either zero or negative. However, there are times when the MR is negative (especially if the fall in price is big).

The relationship between TR, AR, and MR

In order to understand the basic concepts of revenue, it is also important to pay attention to the relationship between TR, AR, and MR. When the first unit is sold, TR, AR, and MR are equal.

Therefore, all three curves start from the same point. Further, as long as MR is positive, the TR curve slopes upwards.

However, if MR is falling with the increase in the quantity of sale, then the TR curve will gain height at a decreasing rate. When the MR curve touches the X-axis, the TR curve reaches its maximum height.

Further, if the MR curve goes below the X-axis, the TR curve starts sloping downwards.

Any change in AR causes a much bigger change in MR. Therefore, if the AR curve has a negative slope, then the MR curve has a greater slope and lies below it.

Similarly, if the AR curve has a positive slope, then the MR curve again has a greater slope and lies above it. If the AR curve is parallel to the X-axis, then the MR curve coincides with it.

Here is a graphical representation of the relationship between AR and MR:

In the left half, you can see that AR has a constant value (DD’). Therefore, the AR curve starts from point D and runs parallel to the X-axis. Also, since AR is constant, MR is equal to AR and the two curves coincide with each other.

In the right half, you can see that the AR curve starts from point D on the Y-axis and is a straight line with a negative slope. This basically means that as the number of goods sold increases, the price per unit falls at a steady rate.

Similarly, the MR curve also starts from point D and is a straight line as well. However, it is a locus of all the points which bisect the perpendicular distance between the AR curve and the Y-axis. In the figure above, FM=MA.

Solved Questions on Revenue

Q1. What is Total Revenue and how is it calculated?

Answer : Total Revenue is the total amount received from the sale of the output. Hence, the total revenue depends on the number of units sold and the price per unit of output. The formula to calculate total revenue is:

TR = Q x P … where TR – Total Revenue, Q – Quantity of sale (units sold), and P – Price per unit of output.

Q2. What is Average Revenue and how is it calculated?

Answer : Average Revenue is the revenue per unit of output sold. Therefore, the average revenue is the total revenue divided by the total number of units sold. The formula to calculate average revenue is:

$$AR = \frac {TR}{Q}$$ … where AR – Average Revenue, TR – Total Revenue, and Q – Total units sold.

Q3. What is Marginal Revenue and how is it calculated?

Answer : Marginal Revenue is the amount of money received from the sale of an additional unit. The formula to calculate marginal revenue is:

MR = TRn – TRn-1

$$MR = \frac {ΔTR}{ΔQ}$$

Where MR – Marginal Revenue, ΔTR – Change in the Total revenue, ΔQ – Change in the units sold, TRn – Total Revenue of n units, and TRn-1 – Total Revenue of n-1 units.

Customize your course in 30 seconds

Which class are you in.

Analysis of Market

• Equilibrium under Perfect Competition – I.
• Equilibrium under Perfect Competition – II
• Oligopoly: Definition, Characteristics and Concepts

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Download the App

• Search Search Please fill out this field.

What Is Revenue?

Understanding revenue.

• Formula and Calculation

Revenue vs. Income/Profit

Special considerations.

• Revenue FAQs
• Corporate Finance
• Financial statements: Balance, income, cash flow, and equity

Revenue Definition, Formula, Calculation, and Examples

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

• Accounting Explained With Brief History and Modern Job Requirements
• Accounting Equation
• Revenue CURRENT ARTICLE
• Current and Noncurrent Assets
• Accounting Theory
• Accounting Principles
• Accounting Standard
• Accounting Convention
• Accounting Policies
• Principles-Based vs. Rules-Based Accounting
• Accounting Method
• Accrual Accounting
• Cash Accounting
• Accrual Accounting vs. Cash Basis Accounting
• Financial Accounting Standards Board (FASB)
• Generally Accepted Accounting Principles (GAAP)
• International Financial Reporting Standards (IFRS)
• IFRS vs. GAAP
• US Accounting vs. International Accounting
• Understanding the Cash Flow Statement
• Breaking Down The Balance Sheet
• Understanding the Income Statement
• Financial Accounting
• Financial Accounting and Decision-Making
• Financial vs. Managerial Accounting
• Cost Accounting
• Certified Public Accountant (CPA)
• Chartered Accountant (CA)
• Accountant vs. Financial Planner
• Tax Accounting
• Forensic Accounting
• Chart of Accounts (COA)
• Double Entry
• Closing Entry
• Introduction to Accounting Information Systems
• Inventory Accounting
• Last In, First Out (LIFO)
• First In, First Out (FIFO)
• Average Cost Method

Revenue is the money generated from normal business operations, calculated as the average sales price times the number of units sold. It is the top line (or gross income) figure from which costs are subtracted to determine net income. Revenue is also known as sales on the income statement .

Key Takeaways

• Revenue, often referred to as sales or the top line, is the money received from normal business operations.
• Operating income is revenue (from the sale of goods or services) less operating expenses.
• Non-operating income is infrequent or nonrecurring income derived from secondary sources (e.g., lawsuit proceeds).
• Non-business entities such as governments, nonprofits, or individuals also report revenue, though calculations and sources for each differ.
• Revenue is only sale proceeds, while income or profit incorporate the expenses to generate revenue and report the net (not gross) earnings.

Investopedia / Matthew Collins

Revenue is money brought into a company by its business activities. There are different ways to calculate revenue, depending on the accounting method employed. Accrual accounting will include sales made on credit as revenue for goods or services delivered to the customer. Under certain rules, revenue is recognized even if payment has not yet been received.

It is necessary to check the cash flow statement to assess how efficiently a company collects money owed.  Cash accounting , on the other hand, will only count sales as revenue when payment is received. Cash paid to a company is known as a "receipt." It is possible to have receipts without revenue. For example, if the customer paid in advance for a service not yet rendered or undelivered goods, this activity leads to a receipt but not revenue.

Revenue is known as the top line because it appears first on a company's income statement. Net income, also known as the bottom line, is revenues minus expenses. There is a profit when revenues exceed expenses.

To increase profit, and hence earnings per share (EPS) for its shareholders, a company increases revenues and/or reduces expenses. Investors often consider a company's revenue and net income separately to determine the health of a business. Net income can grow while revenues remain stagnant because of cost-cutting.

Such a situation does not bode well for a company's long-term growth. When public companies report their quarterly earnings , two figures that receive a lot of attention are revenues and EPS. A company beating or missing analysts' revenue and earnings per share expectations can often move a stock's price.

Revenue may also be referred to as sales and is used in the price-to-sales (P/S) ratio —an alternative to the price-to-earnings (P/E) ratio  that uses revenue in the denominator.

Types of Revenue

A company's revenue may be subdivided according to the divisions that generate it. For example, Toyota Motor Corporation may classify revenue across each type of vehicle. Alternatively, it can choose to group revenue by car type (i.e. compact vs. truck).

A company may also distinguish revenue between tangible and intangible product lines. For example, Apple products include iPad, Apple Watch, and Apple TV. Alternatively, Apple may be interested in separately analyzing its Apple Music, Apple TV+, or iCloud services.

Revenue can be divided into operating revenue —sales from a company's core business—and non-operating revenue which is derived from secondary sources. As these non-operating revenue sources are often unpredictable or nonrecurring, they can be referred to as one-time events or gains. For example, proceeds from the sale of an asset, a windfall from investments, or money awarded through litigation are non-operating revenue.

Formula and Calculation of Revenue

The formula and calculation of revenue will vary across companies, industries, and sectors. A service company will have a different formula than a retailer, while a company that does not accept returns may have different calculations than companies with return periods. Broadly speaking, the formula to calculate net revenue is:

Net Revenue = (Quantity Sold * Unit Price) - Discounts - Allowances - Returns

The main component of revenue is the quantity sold multiplied by the price. For a service company, this is the number of service hours multiplied by the billable service rate. For a retailer, this is the number of goods sold multiplied by the sales price.

The obvious constraint with this formula is a company that has a diversified product line. For example, Apple can sell a MacBook, iPhone, and iPad, each for a different price. Therefore, the net revenue formula should be calculated for each product or service, then added together to get a company's total revenue.

There are several components that reduce revenue reported on a company's financial statements in accordance to accounting guidelines. Discounts on the price offered, allowances awarded to customers, or product returns are subtracted from the total amount collected. Note that some components (i.e. discounts) should only be subtracted if the unit price used in the earlier part of the formula is at market (not discount) price.

One entity's revenue is often another entity's expense. For example, your personal household expense of $1,000 to buy the latest smartphone is $1,000 revenue for the phone company.

Example of Revenue

Microsoft boasts a diversified product line that contributes many types of revenue. The company defines its business in several different channels including:

• Productivity and Business Processes: Office products (commercial and consumer), LinkedIn, Dynamics products
• Intelligent Cloud: Server products and cloud services
• More Personal Computing: WIndows OEM, Windows Commercial, Xbox, Surface.

As shown below, Microsoft reported $49.36 billion during Q3 2022. High-level reporting requirements have Microsoft's income statement being shown between product revenue and service/other revenue.

In supplementary reports, Microsoft further clarifies revenue sources. For example, the breakdown of the $49.36 billion of revenue earned during Q3 2022 was split fairly evenly between the three product lines:

Many entities may report both revenue and income/profit. These two terms are used to report different accumulations of numbers.

Revenue is often the gross proceeds collected by an entity. It is the measurement of only income component of an entity's operations. For a business, revenue is all of the money it has earned.

Income/profit usually incorporates other facets of a business. For example, net income or incorporate expenses such as cost of goods sold, operating expenses, taxes, and interest expenses. While revenue is a gross amount focused just on the collection of proceeds, income or profit incorporate other aspects of a business that reports the net proceeds.

Recognizing Revenue: ASC 606

In 2016, the Financial Accounting Standards Board released Revenue from Contracts with Customers (Topic 606). The accounting standards update outlined new guidance on how companies must report revenue. The guidance requires an entity to recognize revenue in accordance with five steps:

• Identify the contract with the customer.
• Identify the performance obligation in the contract.
• Determine the contract price.
• Allocate the transaction price to the performance obligation(s) in the contract.
• Recognize revenue when the entity satisfies a performance obligation.

Government Revenue

In the case of government, revenue is the money received from taxation, fees, fines, inter-governmental grants or transfers, securities sales, mineral or resource rights, as well as any sales made. Governments collect revenue from citizens within its district and collections from other government entities.

Nonprofit Revenue

For nonprofits, revenues are its gross receipts. Its components include donations from individuals, foundations, and companies, grants from government entities, investments, and/or membership fees. Nonprofit revenue may be earned via fundraising events or unsolicited donations.

Real Estate Revenue

In terms of real estate investments, revenue refers to the income generated by a property, such as rent or parking fees. When the operating expenses incurred in running the property are subtracted from property income, the resulting value is net operating income (NOI). Vacant real estate technically does not earn any operating revenue, though the owner of the property may be required to report fair market value adjustments that result in gains when externally reporting their finances.

What Does Revenue in Business Mean?

Revenue is the money earned by a company obtained primarily from the sale of its products or services to customers. There are specific accounting rules that dictate when, how, and why a company recognizes revenue. For instance, a company may receive cash from a client. However, a company may not be able to recognize revenue until they've performed their part of the contractual obligation.

Are Revenue and Cash Flow the Same Thing?

No. Revenue is the money a company earns from the sale of its products and services. Cash flow is the net amount of cash being transferred into and out of a company. Revenue provides a measure of the effectiveness of a company's sales and marketing, whereas cash flow is more of a  liquidity  indicator.  Both revenue and cash flow should be analyzed together for a comprehensive review of a company's financial health.

What Is the Difference Between Revenue and Income?

Revenue and income are sometimes used interchangeably. However, these two terms do usually mean different things. Revenue is often used to measure the total amount of sales a company from its goods and services. Income is often used to incorporate expenses and report the net proceeds a company has earned.

How Does One Generate and Calculate Revenue?

For many companies, revenues are generated from the sales of products or services. For this reason, revenue is sometimes known as gross sales . Revenue can also be earned via other sources. Inventors or entertainers may receive revenue from licensing, patents, or royalties. Real estate investors might earn revenue from rental income.

Revenue for federal and local governments would likely be in the form of tax receipts from property or income taxes. Governments might also earn revenue from the sale of an asset or interest income from a bond. Charities and non-profit organizations usually receive income from donations and grants. Universities could earn revenue from charging tuition but also from investment gains on their endowment fund.

What Is Accrued and Deferred Revenue?

Accrued revenue is the revenue earned by a company for the delivery of goods or services that have yet to be paid by the customer. In accrual accounting, revenue is reported at the time a sales transaction takes place and may not necessarily represent cash in hand.

Deferred or unearned revenue can be thought of as the opposite of accrued revenue, in that unearned revenue accounts for money prepaid by a customer for goods or services that have yet to be delivered. If a company has received prepayment for its goods, it would recognize the revenue as unearned but would not recognize the revenue on its income statement until the period for which the goods or services were delivered.

Microsoft. " Earnings Release FY22 Q3 ."

Financial Accounting Standards Board. " Revenue from Contracts with Customers ."

• Terms of Service
• Editorial Policy
• Privacy Policy

Cost Allocation

The process of identifying, accumulating, and assigning costs to costs objects

What is Cost Allocation?

Cost allocation is the process of identifying, accumulating, and assigning costs to costs objects such as departments, products, programs, or a branch of a company. It involves identifying the cost objects in a company, identifying the costs incurred by the cost objects, and then assigning the costs to the cost objects based on specific criteria.

When costs are allocated in the right way, the business is able to trace the specific cost objects that are making profits or losses for the company. If costs are allocated to the wrong cost objects, the company may be assigning resources to cost objects that do not yield as much profits as expected.

Types of Costs

There are several types of costs that an organization must define before allocating costs to their specific cost objects. These costs include:

1. Direct costs

Direct costs are costs that can be attributed to a specific product or service, and they do not need to be allocated to the specific cost object. It is because the organization knows what expenses go to the specific departments that generate profits and the costs incurred in producing specific products or services . For example, the salaries paid to factory workers assigned to a specific division is known and does not need to be allocated again to that division.

2. Indirect costs

Indirect costs are costs that are not directly related to a specific cost object like a function, product, or department. They are costs that are needed for the sake of the company’s operations and health. Some common examples of indirect costs include security costs, administration costs, etc. The costs are first identified, pooled, and then allocated to specific cost objects within the organization.

Indirect costs can be divided into fixed and variable costs. Fixed costs are costs that are fixed for a specific product or department. An example of a fixed cost is the remuneration of a project supervisor assigned to a specific division. The other category of indirect cost is variable costs, which vary with the level of output. Indirect costs increase or decrease with changes in the level of output.

3. Overhead costs

Overhead costs are indirect costs that are not part of manufacturing costs. They are not related to the labor or material costs that are incurred in the production of goods or services. They support the production or selling processes of the goods or services. Overhead costs are charged to the expense account, and they must be continually paid regardless of whether the company is selling goods or not.

Some common examples of overhead costs are rental expenses, utilities, insurance, postage and printing, administrative and legal expenses , and research and development costs.

Cost Allocation Mechanism

The following are the main steps involved when allocating costs to cost objects:

1. Identify cost objects

The first step when allocating costs is to identify the cost objects for which the organization needs to separately estimate the associated cost. Identifying specific cost objects is important because they are the drivers of the business, and decisions are made with them in mind.

The cost object can be a brand , project, product line, division/department, or a branch of the company. The company should also determine the cost allocation base, which is the basis that it uses to allocate the costs to cost objects.

2. Accumulate costs into a cost pool

After identifying the cost objects, the next step is to accumulate the costs into a cost pool, pending allocation to the cost objects. When accumulating costs, you can create several categories where the costs will be pooled based on the cost allocation base used. Some examples of cost pools include electricity usage, water usage, square footage, insurance, rent expenses , fuel consumption, and motor vehicle maintenance.

What is a Cost Driver?

A cost driver causes a change in the cost associated with an activity. Some examples of cost drivers include the number of machine-hours, the number of direct labor hours worked, the number of payments processed, the number of purchase orders, and the number of invoices sent to customers.

Benefits of Cost Allocation

The following are some of the reasons why cost allocation is important to an organization:

1. Assists in the decision-making process

Cost allocation provides the management with important data about cost utilization that they can use in making decisions. It shows the cost objects that take up most of the costs and helps determine if the departments or products are profitable enough to justify the costs allocated. For unprofitable cost objects, the company’s management can cut the costs allocated and divert the money to other more profitable cost objects.

2. Helps evaluate and motivate staff

Cost allocation helps determine if specific departments are profitable or not. If the cost object is not profitable, the company can evaluate the performance of the staff members to determine if a decline in productivity is the cause of the non-profitability of the cost objects.

On the other hand, if the company recognizes and rewards a specific department for achieving the highest profitability in the company, the employees assigned to that department will be motivated to work hard and continue with their good performance.

Additional Resources

Thank you for reading CFI’s guide to Cost Allocation. In order to help you become a world-class financial analyst and advance your career to your fullest potential, these additional resources will be very helpful:

• Break-Even Analysis
• Cost of Production
• Fixed and Variable Costs
• Projecting Income Statement Line Items
• See all accounting resources

• Share this article

Create a free account to unlock this Template

Access and download collection of free Templates to help power your productivity and performance.

Already have an account? Log in

Supercharge your skills with Premium Templates

Take your learning and productivity to the next level with our Premium Templates.

Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI's full course catalog and accredited Certification Programs.

Already have a Self-Study or Full-Immersion membership? Log in

Access Exclusive Templates

Gain unlimited access to more than 250 productivity Templates, CFI's full course catalog and accredited Certification Programs, hundreds of resources, expert reviews and support, the chance to work with real-world finance and research tools, and more.

Already have a Full-Immersion membership? Log in

What is Cost Assignment?

Share This...

Cost assignment.

Cost assignment is the process of associating costs with cost objects, such as products, services, departments, or projects. It encompasses the identification, measurement, and allocation of both direct and indirect costs to ensure a comprehensive understanding of the resources consumed by various cost objects within an organization. Cost assignment is a crucial aspect of cost accounting and management accounting, as it helps organizations make informed decisions about pricing, resource allocation, budgeting, and performance evaluation.

There are two main components of cost assignment:

• Direct cost assignment: Direct costs are those costs that can be specifically traced or identified with a particular cost object. Examples of direct costs include direct materials, such as raw materials used in manufacturing a product, and direct labor, such as the wages paid to workers directly involved in producing a product or providing a service. Direct cost assignment involves linking these costs directly to the relevant cost objects, typically through invoices, timesheets, or other documentation.
• Indirect cost assignment (Cost allocation): Indirect costs, also known as overhead or shared costs, are those costs that cannot be directly traced to a specific cost object or are not economically feasible to trace directly. Examples of indirect costs include rent, utilities, depreciation, insurance, and administrative expenses. Since indirect costs cannot be assigned directly to cost objects, organizations use various cost allocation methods to distribute these costs in a systematic and rational manner. Some common cost allocation methods include direct allocation, step-down allocation, reciprocal allocation, and activity-based costing (ABC).

In summary, cost assignment is the process of associating both direct and indirect costs with cost objects, such as products, services, departments, or projects. It plays a critical role in cost accounting and management accounting by providing organizations with the necessary information to make informed decisions about pricing, resource allocation, budgeting, and performance evaluation.

Example of Cost Assignment

Let’s consider an example of cost assignment at a bakery called “BreadHeaven” that produces two types of bread: white bread and whole wheat bread.

BreadHeaven incurs various direct and indirect costs to produce the bread. Here’s how the company would assign these costs to the two types of bread:

• Direct cost assignment:

Direct costs can be specifically traced to each type of bread. In this case, the direct costs include:

• Direct materials: BreadHeaven purchases flour, yeast, salt, and other ingredients required to make the bread. The cost of these ingredients can be directly traced to each type of bread.
• Direct labor: BreadHeaven employs bakers who are directly involved in making the bread. The wages paid to these bakers can be directly traced to each type of bread based on the time spent working on each bread type.

For example, if BreadHeaven spent $2,000 on direct materials and $1,500 on direct labor for white bread, and $3,000 on direct materials and $2,500 on direct labor for whole wheat bread, these costs would be directly assigned to each bread type.

• Indirect cost assignment (Cost allocation):

Indirect costs, such as rent, utilities, equipment maintenance, and administrative expenses, cannot be directly traced to each type of bread. BreadHeaven uses a cost allocation method to assign these costs to the two types of bread.

Suppose the total indirect costs for the month are $6,000. BreadHeaven decides to use the number of loaves produced as the allocation base , as it believes that indirect costs are driven by the production volume. During the month, the bakery produces 3,000 loaves of white bread and 2,000 loaves of whole wheat bread, totaling 5,000 loaves.

The allocation rate per loaf is:

Allocation Rate = Total Indirect Costs / Total Loaves Allocation Rate = $6,000 / 5,000 loaves = $1.20 per loaf

BreadHeaven allocates the indirect costs to each type of bread using the allocation rate and the number of loaves produced:

• White bread: 3,000 loaves × $1.20 per loaf = $3,600
• Whole wheat bread: 2,000 loaves × $1.20 per loaf = $2,400

After completing the cost assignment, BreadHeaven can determine the total costs for each type of bread:

• White bread: $2,000 (direct materials) + $1,500 (direct labor) + $3,600 (indirect costs) = $7,100
• Whole wheat bread: $3,000 (direct materials) + $2,500 (direct labor) + $2,400 (indirect costs) = $7,900

By assigning both direct and indirect costs to each type of bread, BreadHeaven gains a better understanding of the full cost of producing each bread type, which can inform pricing decisions, resource allocation, and performance evaluation.

Other Posts You'll Like...

How to Use the Fair Value Hierarchy to Determine the Fair Value Classification for an Asset

Understanding the Assumptions and Approaches Used to Measure Fair Value Under GAAP

Understanding the Valuation Techniques Used to Measure Fair Value Under GAAP

How to Calculate Deferred Tax Assets for Liabilities for Property, Plant, and Equipment

How to Calculate Deferred Tax Assets for Liabilities for Inventory Costing Methods

How to Calculate Deferred Tax Assets for Liabilities for the Allowance for Credit Losses

Helpful links.

• Learn to Study "Strategically"
• How to Pass a Failed CPA Exam
• Samples of SFCPA Study Tools
• SuperfastCPA Podcast

“I Shouldn’t Be Able to Do This”: How Colbi Passed Her CPA Exams

The 5 Biggest Myths About CPA Exam Study

From 8 Hours a Day to 8 Hours a Week, How Branden Passed His CPA Exams

5 High Impact CPA Study Strategies

How Melodie Passed Her CPA Exams by Making Every Morning Count

Inconsistent CPA Study? Try These 4 Strategies

Want to pass as fast as possible, ( and avoid failing sections ), watch one of our free "study hacks" trainings for a free walkthrough of the superfastcpa study methods that have helped so many candidates pass their sections faster and avoid failing scores....

Make Your Study Process Easier and more effective with SuperfastCPA

Take Your CPA Exams with Confidence

• Free "Study Hacks" Training
• SuperfastCPA PRO Course
• SuperfastCPA Review Notes
• SuperfastCPA Audio Notes
• SuperfastCPA Quizzes

Get Started

• Free "Study Hacks Training"
• Read Reviews of SuperfastCPA
• Busy Candidate's Guide to Passing
• Subscribe to the Podcast
• Purchase Now
• Nate's Story
• Interviews with SFCPA Customers
• Our Study Methods
• SuperfastCPA Reviews
• CPA Score Release Dates
• The "Best" CPA Review Course
• Do You Really Need the CPA License?
• 7 Habits of Successful Candidates
• "Deep Work" & CPA Study