The terms “projected income” and “expected revenue” are common in financial discussions and reports in a business environment. However, the two terms have different meanings and are not interchangeable. It is important that business owners know the meaning of both terms to use them properly in financial planning and budgeting procedures.
Projected vs. Expected
The first words in both terms essentially mean the same. Both “projected” and “expected” refer to the planned or forecast amount of sales or income the company will receive based on data, customer feedback, market demands and competitor analyses performed as part of a planning process. In other words, the terms “projected” and “expected” are interchangeable terms when it comes to discussing planned income or sales figures.
The term "expected revenue" refers to the forecast amount of money the company will earn from sales, services and additional income streams. The term "revenue" includes all money earned before it is divided into salaries, marketing payments, expenses and so forth. In other words, revenue refers to all the funding earned by a company before any deductions are made.
The term “income” refers to the amount earned by a business after deductions are made, including operational expenses, taxes and salaries. The term “projected income” refers to the amount generated by the company after all deductions have been made. For instance, if the projected income of a company is $10,000 per month and the operational expenses are $5,000 per month, the total revenue must be at least $15,000 per month.
Projecting income and revenue are important steps in planning in terms of the company’s finances. Setting an expected revenue figure helps in producing products for sale and marketing the business and its related products to increase the overall revenue. Planned income is also influenced by the amount of revenue coming into the business, but the income figure is increased by reducing expenses and bonus packages.