To calculate net sales, you start with gross sales, which is the total revenue from all sales transactions before any deductions. From this figure, you subtract returns, allowances and discounts.

You should calculate your net worth on a regular basis. Maybe once a month, maybe once a year. Whatever feels right. But you should do it regularly, Burnette says.

When calculating net sales, businesses should exclude taxes to ensure the figure reflects actual earnings from sales transactions. For example, if a product sells for $100 and a 10% sales tax is ...