Net sales show the true revenue your business makes from selling products or services, after subtracting returns, allowances and discounts. To find net sales, begin with your total sales and ...

Source: Motley Fool In many cases, the difference between net sales and gross sales can be much more than an accounting detail.

To get net sales, you subtract returns, discounts and allowances. If, for example, you offer a 10 percent discount when customers pay early, that doesn't affect the gross sales total.

The calculations needed to find total sales and net sales are straightforward. For example, suppose the ABC Widget Corporation generates 1,000 orders in a month.