Calculating Net Sales in 7shifts

Understanding how Net Sales are calculated is crucial for effectively analyzing your restaurant's performance and 7shifts reporting. This article explains the 7shifts Net Sales calculation, assuming you have an active Point of Sale (POS) integration syncing sales data to your 7shifts account. While your POS system may calculate sales differently, 7shifts uses standard accounting practices, excluding service charges and other non-revenue items by default, to ensure consistent and accurate reporting. 

Here's a breakdown of the 7shifts calculation method.

How 7shifts Calculates Net Sales

Net Sales represent revenue after discounts and comps. The 7shifts formula is:

Net Sales = (Gross Sales) - (Discounts) - (Comps)

Where:

• Gross Sales: Total revenue from all sales transactions before any deductions.
• Discounts: Price reductions applied to customer purchases.
• Comps: Goods or services provided free of charge.

Items Excluded from 7shifts Net Sales 

To accurately reflect revenue from direct sales, 7shifts, by default, excludes the following:

• *Service Charges: Fees added to customer bills for service.
• Tips: Payments given by customers to staff.
• Gratuities: Similar to tips, often pre-calculated.
• Fees: Other charges, like delivery or processing fees.
• Non-Revenue Items: Items that aren't direct sales revenue, such as gift card sales (considered deferred revenue).

Including Service Charges in 7shifts Nets Sales: 

Although Service Charges are excluded in 7shifts by default, some POS systems, specifically Toast, TouchBistro, Revel, and Square, can include service charges in their Net Sales calculations by enabling the option in their 7shifts account.  

To include service charges in your 7shifts Net Sales calculations:

1. Log in to the 7shifts web app as an Admin or Manager with the appropriate permissions.
2. Go to Apps & Integrations > My Integrations > [POS] Integration Settings.
3. In the Sales tab, enable "Include service charges." 

⚠️ Note: This will affect all 7shifts sales calculations, including tip pool contributions. We suggested closing your current tip period or waiting for it to end before enabling this setting to prevent potential tip calculation discrepancies.

Troubleshooting Net Sales

If you notice a difference between Net Sales reported in 7shifts and your POS system, follow these steps to identify

1. Download the Payment Reports from your POS. This report typically details a breakdown of revenue, discounts, comps, service charges, and other financial details.
2. Compare the following columns in the report with the expected exclusions from the 7shifts Net Sales calculation.
3. (optional) For a clear comparison, consider using a pivot table in a spreadsheet to compare these totals against 7shifts Net Sales to spot discrepancies.
4. Adjust POS or 7shifts settings:
   1. If you find that service charges or other excluded items are causing the discrepancy, adjust your settings in 7shifts under Apps & Integrations > My Integrations > POS Settings as needed.
   2. If discounts or comps are not aligning, verify how your POS categorizes them.

Click here for more information on troubleshooting sales discrepancies between 7shifts and your POS.