In a standard eCommerce retail environment for accounting you have product, cost, retail price, and profit. When a consumer purchases an item, they typically pay the retail amount of the product at the time of purchase. The retailer then collects that amount, keeps the margin, pays (if they have not already done so) the supplier and ships the product (and deals with taxes). That’s rather simplified of course, and at volume it’s a different story. And our simplified different story is below. Ours is rather different. Not unique (nothing really is), but different. First we have a deposit. Then we have a transaction that subtracts from that deposit. Then if it’s uploaded from a user, they get a slice of the retail price. Then we collect pay the supplier (in this case the content owner) and collect the margin. We don’t really “ship” the product, but it’s a download of a copy, so in that case it’s “shipped.” Oh, I forgot to mention that the slice that goes to the user can also go to a charity. So - that’s it in a nut shell. Now imagine trying to do the accounting for that, have it reconcile and close the books on a monthly basis. We’re working to streamline it, but at the moment there is room for improvement there. I am totally open to room for improvement when it comes to back office functions. Maybe that means tools, maybe that means process. In any case, I always want to make it better. Oh, I didn’t include our operational accounting above, but that’s a breeze, comparitively speaking.

Originally published on WordPress on August 09, 2007. Migrated to this blog on May 29, 2025.