The top line refers to a business’s gross revenue or gross sales—the total amount of income generated from sales before any deductions. The bottom line, however, refers to net income or net profit, which is the remaining revenue after all expenses, taxes, and other deductions are accounted for.
While the top line may look impressive, it’s the bottom line that truly reflects a business’s profitability and financial health, and that’s what ecommerce accounting is all about.
In ecommerce, the top line gives you an idea of how much product is moving through your store, but the bottom line tells you how much money you're actually making after costs like COGS, advertising, and operating expenses are factored in. It’s important to monitor both to get a clear sense of your business's performance. For example, a company with high gross sales but low bottom-line profit may be overspending in areas like marketing or inventory. Optimizing both your top and bottom lines is key to sustainable business growth.
Read our in-depth article about top line vs. bottom line revenue.