What are Gross Receipts?
On many insurance applications, you will see a questions about about your gross receipts. The term gross receipts means the amount of money that your business brings in prior to paying your expenses. For example, if all of your billings and sales bring in $500,000 a year, then your gross receipts are $500,000.
Your gross receipts are often used in the calculation of commercial insurance premiums. Smaller businesses may find that their premiums are not affected much by their gross receipts because they may fall under the minimum premium that needs to be charged.
Gross receipts are not the amount of profit you make. If your gross receipts are less than your expenses and expenditures, then you may not have turned a profit the end of the year.
*NOTE: This is not an official definition, please speak with a financial professional for more information. The author is not an accountant, nor a financial planning professional. Please check with your state and local jurisdiction for rules on operating a business. Coverage options vary by business, location, and are all subject to underwriting approval. The information is purely for educational purposes and not quoted from any legal source.