Gross Income, GI

The Organizing Board Series

Last Revised:  May 23, 2012 4:50 PM

In a simple sense "Gross Income" is all the money received. This is NOT a measure of the profit, but only the cash received.

"Gross Profit" was added as the most important statistic for Vibrant Life on June 9, 2008, HERE.

The Hubbard Management System includes this definition of "Gross Income:"

Gross Income of the org is the total amount of valid collections (cash, checks, money orders, bank transfers received, etc.) representing actual money received in the org for the week, either in the mail or over the counter, as collections for past credit, current recepts or advance payments for any amount for any org service or items sold, and invoidced in the statistic week which ends at 2 p.m. Thursdays [Vibrant Life ends its week at "close of business on Friday]. (Admin Dictionary)

It begins to get complicated when you realize that you can receive a "check" which bounces.  So, should you wait to count checks as GI until the checks have cleared?

You could go either way on that question, but we have examined these possible questions and have settled on a definition.  Others may differ?  This is how WE will define Gross Income.

Gross Income includes money received allowing for the usual experience of of clearing and collection.

  • Currency in hand -- whether deposited or not

  • Checks drawn on US banks

  • Credit Cards that have "cleared" our Merchant Service

  • Money Orders and other similar forms of payment in our hands.

When we receive a check, count it as Gross Income, and we find out that it then bounces in the same statististical week, we would subtract that check from the Gross Income for that week.  If we learn that a check has bounced AFTER the statistical week is closed, even by an hour, we do NOT try to go back and "correct" the Gross Income, but take that bounced check out of the "Corrected Gross Income" for the week in which we learned that it bounced.

Our "statistical week" ends as of the "close of business" on Fridays.  If Friday is a holiday, and no one works on that Friday, then the effective date would be the close of business on the previous working day.

The general principle is that if we count something THIS WEEK, and find out THIS WEEK, that there was an error? Well, that error, in the same week, can be corrected in that week's statistics.

If we learn of any error in a subsequent week, we do NOT go back to revise some previous week's statistics, but handle that as a correction in the current week's statistics, if that is appropriate.

Gross Income is our best estimate of what we have received, allowing the normal expectation of clearance time.

Checks on foreign bank may take a long time to clear.  These may, at the Manager's discretion, be handled by making the sale "open account" and when the check has cleared, counting the cleared check, then, as money received in the week in which we learned that it has cleared.

 

Quotes from L. Ron Hubbard are copyright 1994 © by the L. Ron Hubbard Library. All rights reserved.

 

 

 

 

Quotes from L. Ron Hubbard are copyright 1994 © by the L. Ron Hubbard Library. All rights reserved.