Gross

As gross, we usually refer to those amounts that are subject to additional, known deductions. The latter are typically, for example, taxes. The salary, sales or profit or loss, P&L can be gross. We also use a gross indicator, the GDP, to describe the performance of a country.

We usually talk about a gross amount when various items have to be deducted from something sooner or later, but this has not yet happened. In contrast to the gross, we mean the net amount that is no longer burdened by further deductions. 

In everyday life, many things can be said to be gross, because it also includes later deductions. Since the items to be deducted are most typically taxes, we can talk about everything that is tax in a gross sense. So, we can talk about gross salary, gross sales revenue and gross profit or loss, P&L. 

In the gross-net topic, the most important entrepreneurial knowledge is to never forget which one we are talking about. If one of our suppliers tells you an amount, it must always be clarified whether he means a gross price or a net price. Of course, we also always have to clearly indicate whether we are telling someone else gross or net numbers in a given situation. 

That is why it is important to always consult with at least one accountant when preparing a business plan or financial plan. We need to be aware of what deductions will be charged to the gross sales. If we want to know whether our company is really operating profitably, we should only calculate the actual net amount, for example.