What Is Incoming Money Called? Key Financial Terms

Understanding terms for money received is essential for navigating personal and business finances. The specific term for incoming funds often depends on the source, nature, and context. Clarifying these distinctions provides a clearer picture of financial health and obligations.

General Financial Terms

Incoming money is broadly referred to as income, representing the total financial gain an individual or organization accrues over a period. For businesses, revenue is the total money generated from core operations, such as selling goods or services, before expenses are subtracted. While often used interchangeably, revenue is a business’s starting point, whereas income, or net income, is the remaining amount after all expenses and taxes are deducted.

Receipts are formal records acknowledging the transfer of money or assets for a transaction. These documents provide proof of payment for record-keeping, tax purposes, and financial analysis. Earnings refer to a company’s profits after accounting for operational expenses, taxes, and interest payments. For individuals, earnings also encompass wages, salaries, and investment returns.

Business-Specific Terms

Sales represent the money brought in from exchanging goods or services for currency. Sales revenue is the income a company receives from selling its products or providing services. For instance, a retail store generates sales revenue from goods sold, while a consulting firm earns service revenue from the professional services it provides.

Cash inflow from operations refers to the money a business generates from its primary, day-to-day activities. This includes cash from selling products, collecting accounts receivable, and other routine business receipts. It measures a company’s ability to fund operations without relying on external financing. This figure is distinct from cash flows related to investing or financing activities, focusing solely on the operational side.

Personal and Investment Terms

For individuals, wages are payments based on hours worked or the amount of work completed, calculated on an hourly or daily rate. Salary is a fixed amount paid to an employee over a set period, usually annually, regardless of the exact hours worked. Salaried employees receive a consistent income, while wage earners’ pay can fluctuate based on hours or overtime.

Investment income encompasses money received from financial assets, including dividends, interest, rental income, and capital gains. Dividends are periodic payments made by companies to shareholders, often from profits. Interest is income earned from lending money, such as from savings accounts, bonds, or certificates of deposit.

Rental income is money received from renting out property or assets. Capital gains are profits realized when an investment asset, such as stocks or real estate, is sold for more than its original purchase price. Short-term capital gains, from assets held a year or less, are taxed at ordinary income rates, while long-term gains receive preferential tax treatment at lower rates.

Gifts represent a transfer of money or property to another person without receiving equal value in return. While the recipient generally does not pay tax, the donor may be subject to gift tax if the amount exceeds an annual exclusion limit. Grants are funds provided by government agencies, foundations, or other entities that do not need to be repaid. Grants are considered taxable income for individuals and businesses unless specific conditions are met.