How net profit is worked out
Sales, less refunds and chargebacks, less VAT, less every cost — in that order.
- Gross revenue: what customers paid, from your orders.
- Less refunds and chargebacks: money that went back.
- Less VAT: the tax inside the price, which belongs to the tax office.
- Less goods, with landed cost, then shipping, packaging and handling.
- Less payment fees and Shopify’s fee.
- Less ad spend and your fixed costs.
- What is left is net profit.
The dashboard prints every line, and Reconciliation checks that they add up: revenue less every line equals the profit shown, to the cent.
Margin on the dashboard is profit over gross revenue (VAT included) — the conservative ratio. Contribution margins elsewhere are over revenue excluding VAT, and are labelled so.
Not answered? Write to hello@profflow.co — usually answered within a day.