Tuesday, March 3, 2009

Merchant Accounts and accounting

We just finished the final kickoff meeting for the accounting team for 2009. We implemented a series of changes about how we get our accounting done.

Most significantly, we are considering the receipt of payment at our merchant account vendor account to be revenue. Previously, the accounting system recognized revenue only when the funds were transfered from my merchant account into my bank account. The result was that our revenues appeared uneven. For example, January 2009 ended with a three day holiday. So all the funds received by us from Friday Jan 27 until Tuesday, February 1st were deposited on the first.

So 10% of our January revenues would have, under our old system, been reported in February so our accounts were arbitrarily uneven. New system more accurately reflects revenues.

No comments: