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Getting Double Financial Reports

I reported late in 2011 on what the process is to move from an individual to a company developer account. One effect of this change is that you are getting a new developer account identifier which is a long number beginning with an 8. The main advantage of this move is that you can have multiple team members.

Having been on a company account for a couple of months you might notice that you get daily, weekly and financial reports for both the old and the new account. On iTunes Connect you have a selection to choose the old and the new account. While you cease to receive entires on the daily and weekly reports after a very short transition period you will see financial reports to go on in parallel quite some time longer.

I have been wondering why this is and through probing inquiry with Apple’s Finance Team I managed to uncover the reason for this.

I switched in October 2011 and you can see a drastic drop in the financial report numbers after the switch. But I still have  a couple of dollars of earnings as late as the March sales report for USA. The explanation in one word: Sarbanes-Oxley, in one sentence: It’s the law!

No Back-Dating Allowed

When a customer purchases an app they make that purchase with a credit card, since they are unable to submit payment with cash through iTunes. Once they click to buy your app, that sale will appear in the daily trend reports. The credit card company has to release these funds to Apple, which may be on the same day, within a week, or even longer.

Therefore, there are times that a customer clicks to purchase an app in one fiscal month, but the funds are released to Apple in a different fiscal month. When the credit card company releases the funds to Apple, they get reported in the financial reports. They are only allowed to report transactions that have completed their financial systems, and that may not necessarily be the month in which the transaction was initiated.

Apple has to report those funds when they are received and cannot back date them as that would be illegal accounting acceding to Sarbanes-Oxley rules. This is why you may see differences in the trends reports as opposed to the financial reports. Apple has no control over how long it takes the credit card companies to release the sales earnings to them.

Conclusion

In summary it is not Apple’s fault but entirely the credit card companies’ which apparently can take several months (!) to release funds for individual purchases.

I was told that this transitional period can last several months and while it is a pain to deal with those minute extra reports I can only hope that some day the credit card companies have found and reported all these individual purchases to Apple.

Oh well, maybe … some day …


Categories: Apple

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