eCommerce Glossary
This e-commerce glossary features over 250 essential terms every online seller should know to succeed in digital commerce.
An account balance represents the total amount of money earned and available in an account at a given point in time. In the context of a payout interval, it includes the estimated revenue accumulated from the last payment date up to the current date when the balance is generated.
How to Calculate Account Balance
To calculate the account balance during a payout interval, follow these steps:
- Identify the Last Payment Date:
Determine the date of the last payment or payout made to the account. - Track Revenue Earned:
Accumulate all revenue earned from the last payment date up to the current date. This includes all transactions such as sales, fees, and other earnings. - Subtract Any Deductions:
Account for any deductions or expenses that may have occurred during this period, such as refunds, chargebacks, or service fees. - Sum Up the Values:
Add up the total revenue earned and subtract any applicable deductions to get the current account balance.
The formula can be summarized as:
Account Balance=(Total Revenue Earned)−(Total Deductions)
By regularly monitoring the account balance, businesses can maintain an accurate understanding of their financial position, ensuring they are aware of their earnings and can manage their cash flow effectively.