Non-revenue

Non-revenue refers to financial activities, expenses, or items that do not directly generate income or sales for a business. These typically include costs associated with operational overhead, administrative functions, research and development, or strategic initiatives that aim to improve future profitability, brand awareness, or efficiency but do not immediately translate into sales revenue. This category also encompasses instances where goods or services are provided without any financial exchange.

Non-revenue meaning with examples

• Airlines often categorize factors like empty flights due to low passenger loads or fuel consumption for training flights as non-revenue. This means those costs are incurred but do not result in ticket sales. The focus is on improving operations in the long run.
• In a software company, the time developers spend on internal tools and infrastructure improvements is often considered non-revenue. Although essential for future product development, this work doesn't generate direct sales in the current reporting period. It is classified as an investment.
• A hospital may provide free health screenings to the community as a form of non-revenue activity. While the screening itself doesn't generate immediate income, it enhances the hospital's community relations and potential for future patient acquisition and revenue.
• Transportation services, such as buses, will often carry empty loads as a form of non-revenue travel. This travel accounts for cost, without the immediate generation of revenue. However, the activity aids in the development of the revenue generated by the transportation network.