What Is Transaction Revenue?

Digital Vision./Photodisc/Getty Images

Transaction revenue is money earned through an exchange of cash or credit for goods, services or assets. Businesses earn money from a variety of sources, including those that do not require a business transaction, such as interest earned or a lawsuit award. Depending on the type of transaction, revenue is classified as operating or non-operating revenue.

Operating Revenue

Operating revenue comes from transactions that involve the core profit-making activity of a business. Examples of transactions that produce operating revenue include the sale of goods a manufacturer produces or the sale of items a re-seller buys and then sells. For example, a manufacturer might make widgets and then sell them directly to consumers, or sell them to wholesalers or distributors who then sell them to customers. Payment for services, such as to a contractor who provides bookkeeping services, is operating revenue for the bookkeeper.

Non-Operating Revenue

In addition to windfalls and capital gains, such as investment income, some non-operating revenue occurs via a transaction. Examples include the sale of real estate, machinery or vehicles. For accounting purposes, these revenues are not considered operating revenue because they come from one-time events and are not core business activities. These one-time transactional revenues might be classified as capital revenue or capital transactions rather than operating revenue or operating transactions.


About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

Photo Credits

  • Digital Vision./Photodisc/Getty Images