What Does Revenue Leakage Mean

While leaks can come from both the revenue and the expenditure side most commonly revenue leakage refers simply to not billing or under billing your customer for products and services provided.

What does revenue leakage mean. Revenue leakage is when those movements of funds are not as good as they must be. Revenue means the flow of funds into a firm. Revenue leakage is when your company is losing revenues either unintentionally or usually without noticing. Revenue leakage is the unnoticed or unintended loss of revenue from your company.

Revenue is the movement of assets into a company. If for instance a purchaser who should be paying the full price of something manages in one way or another maybe fraudulently maybe through manipulations of the system to get a discount. The revenue leakage happens when banks deviate from normal methods 1 the bank grants interest waiver to some parties 2 deducting less interest than agreed interest 3 waiver of appraisal charges or processing charges. For example an organization making 50m in revenue can experience leakage of up to five percent or.

Multipliers for drug units. High taxes can have the same effect as can excessive saving or higher interest in purchasing imported goods. The revenue leakage definition is actually surprisingly simple. It results in a gap between supply and demand.

Interest rates are just one way for money to leak out of an economy. It can have many forms. Leakage matters because it represents revenue lost. Lost revenue is not something that small businesses or any business can afford to ignore.

Revenue leakage is where these inflows of funds are not as great as they should be. Kelley blair vice president of professional services at craneware identifies five key sources of revenue leakage.