Service revenue is the total income generated by providing services to customers.
When we are making a business plan and planning revenue sources, the term ‘service revenue’ is much broader than the same term used in accounting. While in accounting, service revenues are precisely defined by an account in the accounting framework, from a business plan point of view, we can consider anything that can be provided in the form of services, including, for example, licensing, subscription, rental, and so on, as a part of service revenues.
What are the most common types of service revenue?
For instance, human work, infrastructure rental, licenses, financial services and much more can be provided as a service. There are one-off as well as recurring service revenues. Services are usually provided at a fixed unit price - rate, such as an hourly rate, a package delivery, a megabyte of transmission, and so on.
- Recurring service revenue (eg subscription, SaaS, Internet connection)
- One-off service revenue (eg haircut, legal services)
- Revenues from granting the right of use (eg license)
- Revenues from the provision of property (eg rent, leasing)
- Revenues from mediation