Net revenue clause: Copy, customize, and use instantly
Introduction
A net revenue clause defines how net revenue is calculated and used within an agreement. It typically subtracts costs such as refunds, taxes, discounts, and third-party fees from gross revenue to determine the actual amount available for sharing, payments, or performance calculations. Clear net revenue clauses help avoid ambiguity, prevent disputes, and create a fair basis for revenue-based arrangements.
Below are templates for net revenue clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard net revenue definition clause
This clause provides a clear formula for calculating net revenue, offering transparency in financial arrangements.
“Net Revenue” means gross revenue received from the sale of [products/services], less applicable sales taxes, refunds, chargebacks, third-party processing fees, and promotional discounts actually applied.
Net revenue clause with cost deduction breakdown
This version outlines each deduction in detail, making the calculation more precise and predictable.
Net revenue shall be calculated by deducting from gross revenue the following items: (i) sales or use taxes, (ii) returns and customer refunds, (iii) platform or transaction processing fees, and (iv) any promotional or loyalty program discounts.
Net revenue clause with fixed exclusions
This clause lists specific exclusions from the net revenue calculation to avoid future disputes.
For clarity, net revenue shall not include amounts received from internal transfers, sample distributions, test transactions, or revenue derived from bartered services.
Net revenue clause with quarterly reconciliation
This version allows for adjustments and corrections after reporting periods, keeping figures accurate over time.
Net revenue figures shall be subject to quarterly reconciliation, where any overstatements or understatements due to delayed refunds or adjustments shall be corrected in the following quarter’s revenue report.
Net revenue clause with affiliate fee deduction
This clause ensures that affiliate commissions are subtracted before net revenue is calculated, offering clarity in partner-heavy sales models.
Net revenue shall exclude any commissions or referral fees paid to affiliate partners, as documented in Schedule B. These costs shall be treated as deductions prior to revenue share calculations.
Net revenue clause with defined refund adjustment window
Clarifies the time period within which customer refunds can affect net revenue reporting.
Refunds issued within 90 days of the original sale shall be deducted from net revenue. Refunds issued after this window will not retroactively reduce previously reported net revenue.
Net revenue clause with payment gateway fee exclusion
Focuses specifically on digital transaction costs as a deduction.
Net revenue shall be calculated by deducting payment gateway transaction fees, including credit card processing charges and digital wallet fees, from gross revenue received.
Net revenue clause with bundled service allocation
Addresses how to allocate net revenue from packaged or bundled offerings.
Where products or services are sold in a bundled offering, net revenue shall be allocated proportionally based on standalone list prices, unless otherwise agreed in writing.
Net revenue clause with capped discount deductions
Limits how much of a discount can reduce net revenue, helping protect the payable amount.
Discounts deducted from gross revenue shall not exceed 20% per transaction when calculating net revenue. Any excess promotional value shall be absorbed by [Party A].
Net revenue clause with minimum margin preservation
Protects margin by limiting eligible deductions.
Net revenue deductions shall not reduce total revenue below a minimum net margin of 10% per transaction. If deductions exceed this limit, the excess shall not be considered.
Net revenue clause with region-specific deduction rules
Applies different deduction rules by geography to reflect market norms.
Deductions used in calculating net revenue shall be applied in accordance with local market conditions in each region. A region-specific deduction matrix is attached in Schedule C.
Net revenue clause with tax-inclusive pricing adjustment
Normalizes gross revenue figures when tax-inclusive pricing is used.
For jurisdictions where product pricing is tax-inclusive, applicable taxes shall first be extracted from gross revenue before net revenue is calculated.
Net revenue clause with depreciation carve-out
Ensures that non-cash accounting entries like depreciation are not treated as deductions.
Depreciation and amortization shall not be treated as deductions in the calculation of net revenue under this agreement.
Net revenue clause with per-channel adjustment
Differentiates net revenue by sales channel (e.g., direct, distributor, online).
Net revenue shall be calculated separately for each sales channel. Deductions applicable to one channel shall not affect net revenue reported in other channels.
Net revenue clause with volume-based deduction adjustment
Adjusts deduction limits based on sales volume to ensure fairness.
Deductible costs per unit shall be capped at $X unless total units sold exceed [Threshold]. Above this volume, allowable deductions may be increased proportionally.
Net revenue clause with fixed per-unit deduction model
Simplifies calculation using a flat deduction per item sold.
Net revenue shall be calculated by deducting a flat cost of $3.50 per unit sold, representing average transaction and fulfillment expenses.
Net revenue clause with quarterly deduction cap
Introduces a ceiling on total allowable deductions per reporting period.
The total amount of deductions applied to gross revenue shall not exceed 30% in any given quarter unless agreed in writing by both parties.
Net revenue clause with license-specific revenue attribution
Ensures net revenue is linked only to licensed intellectual property.
Only revenue attributable to the use or sale of licensed content shall be included in net revenue calculations. Other income sources are excluded by default.
Net revenue clause with chargeback buffer reserve
Creates a buffer to absorb chargeback impact before affecting revenue share.
A 5% chargeback reserve shall be maintained from gross revenue to absorb transaction reversals. Only amounts exceeding this reserve shall be deducted from net revenue.
Net revenue clause with approval requirement for extraordinary deductions
Ensures large or unusual deductions require pre-approval.
Any deduction from gross revenue exceeding $10,000 per item must be pre-approved in writing before being included in net revenue calculations.
Net revenue clause with rolling deduction average
Smooths volatility by averaging deductions across multiple periods.
Net revenue shall be calculated using a rolling three-quarter average of standard deductions to reduce the impact of seasonal or outlier deductions.
Net revenue clause with cap on fulfillment cost deductions
Limits fulfillment costs as a proportion of deductions.
Fulfillment-related costs shall not account for more than 15% of total deductions from gross revenue in any reporting period.
Net revenue clause with shared deduction burden
Splits certain deductions between parties instead of applying all to net revenue.
Marketing rebates and promotional discounts shall be shared equally by both parties and not deducted entirely from gross revenue for net revenue purposes.
Net revenue clause with customer acquisition cost exclusion
Prevents customer acquisition expenses from reducing net revenue.
Customer acquisition costs, including paid ads, sales commissions, and lead generation expenses, shall not be treated as deductions in net revenue calculation.
Net revenue clause with fixed deduction matrix
Standardizes deduction values by item type.
Net revenue shall be calculated using a fixed deduction matrix, where each product or service has pre-agreed deduction amounts listed in Schedule D.
Net revenue clause with currency fluctuation buffer
Protects against adverse FX swings in deductions.
Net revenue calculations shall apply a +/-3% buffer on foreign exchange conversion to mitigate the impact of currency fluctuations on revenue deductions.
Net revenue clause with services vs product split
Applies different deduction rules to services and products.
Net revenue from services shall exclude delivery costs and platform fees. Product revenue shall exclude only returns and transaction fees.
Net revenue clause with deduction verification protocol
Adds transparency to deduction review.
All deductions applied in net revenue calculations must be supported by documentation and verified in quarterly financial statements shared with [Party B].
Net revenue clause with retention holdback for adjustments
Reserves a portion of revenue for future adjustments.
5% of net revenue share shall be held back each quarter to accommodate post-period adjustments. Any unused holdback shall be released after 90 days.
Net revenue clause with loyalty program impact adjustment
Accounts for loyalty points or cashback redemptions.
The value of redeemed loyalty rewards or cashback credits shall be treated as deductions from gross revenue when calculating net revenue.
Net revenue clause with exclusivity incentive multiplier
Encourages exclusive distribution.
If [Party B] maintains exclusive rights, an additional 10% multiplier shall be applied to the net revenue share for as long as exclusivity remains in effect.
Net revenue clause with milestone-linked deduction flexibility
Allows deduction rules to evolve after milestones.
Upon reaching $5,000,000 in cumulative revenue, deduction rules may be renegotiated by mutual agreement to reflect scale economies.
Net revenue clause with product return rate threshold
Limits return deductions to a defined rate.
Deductions for returns shall not exceed 8% of gross revenue. Excess return rates must be investigated jointly before affecting net revenue.
Net revenue clause with deduction dispute resolution
Defines how to resolve disagreements over deductions.
If either party disputes a deduction affecting net revenue, the issue shall be escalated to the financial committee for resolution within 10 business days.
Net revenue clause with seasonal adjustment factor
Adds flexibility for businesses with seasonal sales cycles.
Net revenue figures shall be seasonally adjusted using historical averages from prior years to account for predictable fluctuations in sales volume and return rates.
Net revenue clause with volume rebate exclusion
Prevents rebates offered to high-volume buyers from distorting net revenue.
Volume-based rebates or bulk purchase discounts provided to customers shall be excluded from the net revenue calculation and accounted for separately.
Net revenue clause with deferred revenue treatment
Clarifies how deferred revenue is handled in reporting periods.
Revenue that is invoiced but not yet earned shall be excluded from net revenue until the related goods or services are delivered and revenue is recognized.
Net revenue clause with separate treatment for recurring revenue
Distinguishes between subscription revenue and one-time transactions.
Net revenue from recurring subscriptions shall be reported separately from one-time transactions, with deductions applied specific to each revenue type.
Net revenue clause with pre-agreed deduction percentages
Simplifies reporting by fixing deduction percentages in advance.
Deductions shall be applied to gross revenue using pre-agreed percentages for each category, as detailed in Schedule E, rather than itemized actuals.
Net revenue clause with joint sign-off for major deductions
Requires both parties to approve large deductions.
Any individual deduction greater than $25,000 must be approved jointly by both parties before it can be factored into net revenue reporting.
Net revenue clause with defined calculation hierarchy
Establishes a strict sequence for applying deductions.
Deductions shall be applied in the following order: (1) returns, (2) taxes, (3) transaction fees, (4) promotional discounts, and (5) affiliate commissions.
Net revenue clause with no double deduction rule
Prevents the same cost from being deducted more than once.
A single deduction item may not be applied under multiple deduction categories. All deductions must be uniquely classified to prevent double counting.
Net revenue clause with late adjustment lockout
Prohibits post-period revenue restatements after a cutoff date.
No additional deductions or adjustments shall be applied to previously reported net revenue after 60 days from the end of the reporting period.
Net revenue clause with independent verification right
Allows third-party review of net revenue calculations.
Either party may appoint an independent accountant to verify the accuracy of net revenue calculations once per fiscal year, at its own cost.
Net revenue clause with standard deduction templates
Requires consistent formatting for deductions.
All net revenue calculations must be submitted using the standard deduction template provided in Schedule F, to maintain consistency in reporting.
Net revenue clause with partner-specific net revenue stream
Applies net revenue terms only to revenue tied to a specific partner.
Net revenue under this agreement applies solely to sales derived from customers referred or serviced by [Partner Name], and excludes all unrelated sales activity.
Net revenue clause with customer cancellation impact
Treats cancellations as part of deduction treatment.
In the event of customer cancellations resulting in service reversals, the associated amounts shall be treated as deductions from net revenue in the applicable period.
Net revenue clause with exclusion of barter or trade transactions
Clarifies handling of non-monetary transactions.
Revenue generated through barter, exchange, or non-cash trade agreements shall be excluded from net revenue calculations unless converted to a fair market value in writing.
Net revenue clause with onboarding cost recoupment
Allows initial costs to be recovered before applying share percentages.
[Party A] shall deduct initial onboarding and implementation costs from gross revenue before applying the agreed net revenue share percentages to [Party B].
Net revenue clause with late payment buffer
Accounts for customer delays in payment.
Revenue from unpaid invoices aged over 60 days shall be excluded from net revenue until payment is received, then added to the subsequent reporting period.
Net revenue clause with per-customer cap
Limits deductions per customer.
Net revenue deductions attributable to any single customer shall not exceed 25% of the revenue from that customer during a reporting period, unless otherwise agreed.
Net revenue clause with annual audit trigger
Triggers a deeper audit if large variances arise.
If year-end net revenue calculations vary by more than 15% from quarterly estimates, a full independent audit of deductions and reporting shall be conducted.
Net revenue clause with real-time deduction tracking
Requires ongoing visibility of deductions.
[Party A] shall maintain a shared dashboard showing all real-time deductions applied to gross revenue, accessible by [Party B] for transparency.
Net revenue clause with shared deduction approval workflow
Formalizes a joint workflow to manage revenue deductions.
All deduction categories applied to net revenue shall follow a jointly approved workflow process, with clear review and escalation steps outlined in Schedule G.
Net revenue clause with expense allocation limit
Prevents misuse of indirect expenses as deductions.
Only directly attributable costs may be deducted from gross revenue when calculating net revenue. Shared or overhead expenses shall be excluded.
Net revenue clause with product performance threshold
Links deductions to product return rates.
If a product’s return rate exceeds 10% in any quarter, the parties shall review whether such deductions should continue to apply to net revenue under the same terms.
Net revenue clause with renegotiation trigger
Allows renegotiation based on sustained deduction levels.
If deductions exceed 40% of gross revenue for three consecutive quarters, either party may initiate renegotiation of the net revenue clause.
Net revenue clause with dispute resolution tied to accounting standards
Anchors disputes to standard frameworks.
In case of a disagreement over net revenue calculation, the matter shall be resolved based on GAAP or IFRS standards, as applicable under this agreement.
Net revenue clause with sunset review mechanism
Schedules regular review of deduction terms.
The parties shall conduct a joint review of all deduction categories and net revenue calculation methods every 12 months, with any revisions requiring mutual written agreement.
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