What Is "net Turnover"?


Net turnover is a value that takes on different meanings across business processes, but it generally refers to a figure measuring the arrival of new employees or total sale volume. According to Jonathan Lister for the Houston Chronicle, net turnover can help business owners identify and correct problems in an organization while providing information regarding the company's success on the open market.

In accounting terms, net turnover is annual sales volume minus sales tax, discounts and other costs. According to Lister, this important figure reveals a company's net profit from sales. Business owners may choose to invest this profit back into the company to boost growth.

In regards to business inventory, net turnover is the figure measuring how many times business assets need to be replaced in a given period, notes Lister. These assets may include monetary units, building materials or a company's inventory. This figure lets businesses see which items and services consumers are purchasing and how fast they are buying them. In the realm of human resources, net turnover refers to the number of new employees being hired to replace previous workers within a one-year period. High turnover rates are undesirable because they lead to increased training costs and other expenses.