Transcript for:
App Store Payment and Accounting Overview

hello everyone welcome to the understanding app store payments and accounting chat um i'll kind of dilly dally a little bit i see quite a few people already here but i do like to give folks a few minutes to trickle in um wanted to introduce ariel um he is the ceo and co-founder with your brother right of of app figures yes that is correct ariel so i've known ariel since gosh what 2009 um you know i i started my company in 2008 and was beating my head against the reporting from apple and found app figures very early so i was was probably among your first you know hundreds of customers thousands of customers i i think i maybe even been on your beta or something um anyways why don't you introduce yourself and and uh tell us a little bit about app figures oh i would love to so first thank you for having me this i've known david for so long and i've wanted to do something like this for so long so it's good to actually do it and for those of you who do know me hi ariel for nap figures and that's how i go on youtube but for those of you who don't my name is ariel i co-founded app figures way back in the day when the app store just started it was kind of the end of 2008 actually launched in 2009 with the idea of we're developers we need to understand how our business is doing and that was back when data was not easily accessible and there was only a little bit to begin with so i hacked together this thing over the weekend and i liked it so much and i showed it to other people like oh can we have access to this like we need this so i said sure let's build a platform out of it build a platform and um the goal from day one between me and my brother we like to solve problems and we like to connect the dots we believe information is how you make better more informed decisions information and informed and so over the years that's kind of been our goals how do we give you all the dots so you can connect them and help you connect them it started with easy analytics and now we have very complicated analytics we make it easy we track pretty much everything that you can see in app store connect and in google play and then overlay a ton of data on top of it so we bring in data that isn't in app store connect like your review so you can respond to them and do everything that needs to happen on that side we have a whole new suite of apps for optimization tools that's been a huge huge way for developers to get more visibility on the app store and on google play without having to pay for ads and recently we also introduced a suite of app intelligence tools that give you the ability to kind of understand what's going on in the market i think understanding your competition is such an important tool in the arsenal of growing and making more money and getting more downloads on the app store and there was really no solution for this it was like way crazily expensive or requires just abusing all of your privacy and we do neither pretty inexpensive uh honors privacy and that's me in a nutshell i also do a lot of youtube videos and a lot of content that explains how to use all these things and how to turn them into more downloads and money well that was a great introduction thank you and uh most of y'all know revenue cat you probably came here from an email sent by us so i won't i won't uh do quite as long an intro but revenue cat is the subscription platform built for mobile apps so we a lot of people probably are a little confused like i figured revenue cap don't you all compete like you both have dashboards you both like analyze the data uh we don't actually i mean i guess there's like some small overlap in our product um but so with revenue cap we actually provide the sdk inside the app to manage transactions and then by being part of that chain one we make it so much easier like in my my personal house i used to have and don't hate me but i used to have in-app uh receipt validation uh which is just a terrible idea and was so buggy um which is how i ended up at revenuecad i ended up there as a customer first and then eventually joined um but by being part of the transaction we do you know server-side receipt validation it seems like oh well that's super easy you know what what else does rubycat do well you know we have a ton of great integration so you can send data to attribution providers to analytics like mixpanel and segment and uh amplitude and others and then some of the other stuff that's super cool is that because we're handling the server side we get near real-time data on people turning off auto renew on uh subscriptions going into grace period which we'll talk about here in a sec and so we're able to push those to crm tools like uh iterable brays and some other tools like that and so we have charts where you can understand your data and again because we have transaction level data our charts look a little different than ariel's charts because we're actually dealing with the transaction level data we also are great for customer support teams because we can actually show an individual user's entire history so customer support teams love us because they can actually dig into and find what's been going on with renewals and cancellations and things like that at an individual user basis uh and so much more mostly again most of you already know uh revenue cats so i won't go on and on um but did just let us tiny think to that a tiny thing to that there are like 70 or 80 different events at this point that apple is producing for subscriptions so just doing this in any way that isn't through a platform just makes no sense to me yeah no sense and then managing it cross-platform so we support the app store play store amazon store stripe on the web and we've actually got a few more web payment providers that will be integrating soon so kind of become that one single source of truth for your subscription data so enough pitching you guys want to hear about about app store accounting so um in preparing for this i actually learned a ton so ariel and i both have done deep dives into app store accounting for uh you know 14 years now ever since the very beginning of the app store and we're both still learning new things so if you feel lost we're both experts in this and learn new things this week so we're going to try and summarize it all and we'll probably have to do another one next year because things will change uh but let's dive into uh transactions on the app store uh so on the surface you would think oh it's simple like a customer pays and then eventually apple pays you ah what's so hard about that well here are all the steps uh along the way and all the different ways that that can go wrong and then all the ways that that's going to screw up your accounting so the first thing is after a customer pays a transaction doesn't actually go in immediately like if you're at a gas station your credit card's going to get charged immediately apple actually puts transactions into a pending state and tries to bundle them and this is back from the you know app store was built on top of itunes infrastructure and itunes didn't want to pay 30 cents per uh transaction to the credit card processors and so what they smartly did was like well if you're buying one song maybe you're going to buy a couple of more and so they waited to actually charge the card until they could accumulate multiple transactions so still to this day what you know 20 years after the itunes store originally launched with that as the reason for doing it apple still will delay transactions and try and bundle them so first step is it's is even if a trend even if the customer pays the credit card might not actually get charged immediately um then you can branch out from there into apple actually settling the transaction which is hopefully and you know probably 80 percent of the time what happens is that it it does actually get settled within you know 24 or 48 hours um an interesting thing there that that pending period can um cross over fiscal months it can cross over calendar months so you know a a a payment in one fiscal month actually gets settled in the next fiscal month so it's all kind of straddling that isn't mass accounting wise and then of course the transaction can fail if somebody doesn't have enough on their app store prepaid account if they have a debit card if their credit card's maxed out if a bad number expired car i mean there's a ton of reasons why the transaction can actually fail apple has gotten really good about retrying those transactions and then there's specifically a grace period that you can enable in app store connect where apple will continue to retry and i thought that was only 14 days but we'll talk later that this it can actually go i think 40 plus days from when the customer pays to when the transaction actually gets settled because apple just keeps trying and then waiting and then trying and then waiting so you kind of get in this loop now eventually uh you know if it is something like an expired credit card where where they can't get the updated information or something you will have canceled transactions so now you have a payment that you know customer paid you've granted them access and then at some indeterminate point in the future the transaction actually doesn't go through uh and so that transaction is cancelled uh the revenue that showed up on your daily report the revenue that you know we tracked at revenue cat uh goes away um and then for the transactions that do make it through this this journey which which again it's a surprising number that do end up in this grace period loop but for the ones that are settled um apple sets aside taxes um and google does very similar things we're going to talk about that a little more detail ariel is kind of the expert on google i'm been way more focused on on apple's side of things so i'll talk about apple more and then refunds get deducted so you know if you do have a transaction that failed that gets pulled out if somebody refunds that gets pulled out if there's a chargeback that gets pulled out uh you know there's all sorts of kind of uh as you would expect running any business uh you know some of that money gets pulled out of what's accruing in your uh uh in apple's bank account um and then uh currency conversion doesn't happen until the day of payment and so this this whole long perilous journey it is sitting in apple's bank account in whatever currency it was paid in so if you've made a sale in uh the uk it's in british pounds it's in an apple bank account in ireland i believe in british pounds um and then eventually if you meet the payment threshold and there are still payment thresholds i thought those had gone away uh but uh you can i don't know yeah they changed um that was the aggregate that is where you look at the at the sum not each individual region right and so they and so in the u.s it's something like three cents now right it's like they'll pay you pretty much almost anything and then but then there's a lot of other countries where it has to be over 150 dollars for them to make a payment so most of us here talking will probably meet the payment threshold uh what one question i have for you ariel is it a per country or is it is it it is the total aggregate where let's say you made five dollars in mexico but you made 10 000 in the u.s you don't hit the payment threshold for mexico right they'll just pay you the 105 total yeah i'm pretty sure because the way they had it if you're like way back in the day they had i would say like three or four regions around the world where they were doing all this collection with the ww uh or rest of world getting everything else and now they have so many almost every big area gets its own region so that i think they couldn't do that anymore and they had to make it into an aggregate because it just otherwise you would never make money because of the way they split it up so it makes sense to me yeah back when back when i started back in in uh in 2008 it was it was really it was even more confusing because you would make money and you'd see the reports and then like in smaller countries it would just get held for indeterminate amount of time until you pass that cap so that's much more simplified and to get more details check out apple's website on that but again it's really much less of an issue these days where most people are going to hit the payment threshold and get the full payment every month um so then once it's gone through this whole journey you get paid and we're going to talk through the payment calendar but from when a customer pays to when you get paid by apple can be up to uh 63 days actually no it can be up to uh 68 days because you can have a decision here you can have a 35 day fiscal month and then apple always pays except for like four exceptions in 14 years uh 33 days after the end of the fiscal month so you could have a you know january first transaction the fiscal month is 35 days long and you actually don't get paid let's just go ahead and go to that slide um so this is apple's fiscal month and this is this is part of the confusion i i for years uh kind of beat my head against this wall and finally a couple of years ago created a color coded chart to understand this uh and so so this is a perfect example uh january 2022 fiscal month started december 26th and that's actually q2 that's the beginning of q2 for apple um now you can run your own fiscal year and own accounting you know whatever makes sense for you but your payments from apple are going to be aligned to this fiscal calendar so janu so december 26th the day after christmas people are you know have their their uh app store cards out and are buying your app um you don't get paid if you can follow the blue uh to march 3rd so the fiscal month of january is 35 days it ends the 29th of january and 33 days later you get paid on uh thursday march 3rd which is actually yesterday so i actually just saw that hit my bank account yesterday and um and so if you give if we get back to that transaction again the customer paid on the 26th um but you're not actually getting paid and it's sitting in british pounds that entire time so uh i've seen a ton of this where you know uh um the daily sales are way different than the payment and some of that has to do with the the currency so you know within revenue cat within daily reports within others we're uh we're doing a best estimate on what the currency conversion rate is currently but as we all know currency fluctuates and so that uh 65 68 day span um can change a lot and so it's really important to know as you're you know figuring these things out that that those currency conversions can make a big swing in in what you actually get paid and then um ariel tell us about google's payment calendar which is actually nicely much more simple well it's a calendar number one apple's calendar is basically a bunch of weeks if you think about it this way it's a bunch of weeks kind of clumped together in a way that made sense to apple's investor relations which is really how all this happened this is apple's own fiscal calendar of how they report their earnings and that's why they have it in a ways like the five week four week four week they just made it work with everyone else but on the google side it's a basic actually and they basically pay you a quick quick anecdote i actually heard from somebody who said uh apple's uh fiscal year starts in the holiday quarter because steve jobs wanted to start the year on a high and the holiday quarter was always good for apple in like consumer land and so even these like little random esoteric things are have reasons that date back to like the 80s of why apple's fiscal year starts in september instead of you know like most other fiscal years so go ahead and google well like everything apple is so weird and so complicated and has all these different nuances but if you think about it for long enough it kind of makes sense maybe it's not the kind of sense that we want as developers but it kind of makes sense which is always kind of a consistent thread across everything that i see from apple maybe it's not obviously obviously making sense but if you think about it enough and that's the same sort of mindset i apply when i do aso teardowns and keyword teardowns all these algorithms all these decisions that apple makes they make sense somehow just have to figure out how on um the google side things are a lot simpler because they don't align this with really anything else that doesn't make sense to normal mere mortals so they just pay you it's not always exactly on the date but you can say that about pretty much everything google when it comes to getting reports out when it comes to i'm getting paid it's always within the vicinity of a few days but overall so much simpler and i think also on the subscription side it's so much simpler more basic as far as the data they provide and the tools they offer for subscriptions as i'm sure you know even more than i do but it is more simplistic overall so payments are not different yeah and does google work similarly as far as accruing the revenue in the native currency or do they actually convert on the day into whatever the payment currency is going to be i'm pretty sure they convert on the date so transactions happen because we can get transactional data from google unlike what we get from apple and we keep track of all of that we have all that information at the time that we recognize the transaction and that's almost immediately so unlike apple if there is a refund or a chargeback like i saw one of the questions in the questions list those will happen as a separate transaction later and we'd have to account for it as we do this the the other thing about apple and google that's a little bit different apple provides data to us and there's a question also in the questions about how to see all this data and you can see a bunch of it with through revenue cap because the transactions come in but on our end we track all that data directly from apple and so the taxes the um the conversion rates the currencies and there's a whole slide that explains how we do it because it comes out at different times there's another slide about that too but on the google side it's really all together so gross revenue net revenue um they only really give us one number one set of data and that's a transaction and we derive all of it out of it all of it all the data out of it whereas on the apple side we get data broken down but some of it is also a little bit more hidden so that's also another difference between apple and google and how much accounting we need to do when we work with both of them when we get reports from both of them yeah awesome and before we get into the detailed reports i did want to kind of bring up taxes and compliance because this is a question we get a lot um now i'm not a lawyer or an accountant so you need to talk to a learner accountant but you know for my business that i've run on the app store for 14 years now um you know apple does collect all vat sales tax by state in the u.s they handle compliance globally so you know if i'm selling in sri lanka or mexico or you know anywhere in the world they're making sure that they're the store is in compliance there's actually been a lot of stuff recently like uh india passed a law where you can't have recurring subscriptions over a certain uh amount and so um you know one i don't have to think about it as a revenue cat customer because revenue cat has figured out that out and and is part of our sdk now but then two i don't have to think about it as uh as an app store uh with app store payments because apple's gonna make sure that they're compliant with all those kind of things um so the caveat here is that if you do start selling on the web with stripe or braintree or adding add-in um or any of those others that's where the tax and compliance burden does fall on you and if you do collect web payments i would definitely suggest getting a lawyer and an accountant and you know there are some sas tools through stripe and you know all of these platforms do have some help but one of the things i've personally really enjoyed running an indie shop where you know i i've never even had an employee uh is that i don't have to worry about taxes compliance and it's all just handled apple collects it they remit it you know as i showed on that first slide apple actually pays the taxes out um and so my accounting and compliance side of things has been super simple which you know just to to wax nostalgia for a sec really blew my mind in 28 in 2008 i you know i wasn't in tech i wasn't in software and i started my app business and when i started getting these transactions in from all these countries around the world where i wasn't even thinking about you know taxes and compliance and language and like all these other things and and my apps were just selling it it like totally blew my mind um how much apple did handle of all of that uh ariel you looked like you wanted to chime in oh no i was just gonna say that's a really good point because there's all these things that as a developer or as a business owner you need to be considering taxes is just one of them and apple really makes all of that mostly opaque i think to developers which is good and bad but at the end of the day it's mostly good for everyone yeah and then your table is right yeah exactly the same but yeah so there's a few caveats with google with uh vit and some other stuff so uh what were you telling me about that so let's talk about taxes quickly and the u.s taxes are fairly simple outside of the u.s you have vat value-added tax and that's not a concept we're used to so i think for europeans for people outside of the us it just it's kind of common sense whereas here it isn't but vts get added on top of on top of pricing in general so not only does the app store take care of making all those payments and holding withholding all that money they also kind of eat it into the price so everything makes sense and you at the end of the day as a user you're downloading a 99 app or whatever it is in the local currency on the google side it's not at all like that so taxes are being added on top of it and while apple does do the reporting properly so in your gross revenue it will show you data your revenue with taxes and in your net revenue it will be without taxes which kind of makes sense right google doesn't they never really talk about taxes and google also has all these like really strange rules where if you ask them very politely to not collect taxes for you and you give them a good enough reason they'll stop collecting taxes for you and because they don't report it correctly it's really hard to tell what's going on just by looking at those transactions that i was mentioning before so apple definitely takes all that headache out but they also make it opaque enough that for large enough companies who have you know all those accountants and and financial folks who want access to that data it's always a little bit more difficult to get access to it so a good in a bad depends on where you're sitting nice let's talk about the payment reports that we do get and we'll start with apple uh and then can you can dive a little bit into google we didn't create slides for google because i'm so apple focused and i'm the one who prepared the slides but uh yeah tell us about the daily and the financial and the payment reports and why uh only one is the real source of truth so in the apple in apple land when it comes to reporting and you want to take apple's reporting when it comes to money because you want to be as accurate as possible you don't really get one report that gives you everything you need on a daily basis you get a daily list of all the transactions aggregated and then you have that for a certain amount of time so that's actually for a whole year of daily reports that you can go back so you only have some limitation you only have some limited data ultimately and then you have some weekly reports and monthly and yearly reports but that's really all you get on a daily basis so if you want to run your business you can't wait you have to do on a daily basis that's what you get it's mostly almost always good and we'll look at some numbers in a little bit they'll give you an idea of what i mean by that but those are daily reports we track those we show those we include those in emails that we send out and those are really useful because without them you'd be completely completely blind to how your app is performing from a business perspective but then financial reports come out and financial reports are what we were mentioning before every region where money is collected at the end of apple's month they close the books on that month and they give you a list of how much money you made in that particular region and they do it by region there's a summary report as well but ultimately all that data is available by region not always at the same time which is very odd but for the most part it's at the same time but that doesn't really have the um the currency the exchange rate for that currency that you're getting paid on like david was saying before so on a daily basis you have the actual transactions on a monthly basis you have the more accurate financial transactions so any sort of chargebacks or transactions that didn't clear or transactions that got cancelled all those kind of move into the financial report and then later on you get a payout report which has how much money apple actually gave you in the actual currency so if it's coming from europe it will turn in and you're in the us it will turn into dollars from all these different countries but that comes a long time after the month actually even ended so all those on their own are kind of useful for different purposes but what if you want to know exactly how much money a specific app made and i only asked that because the payments report doesn't always have the data the way you want it to be and because data is split up by regions and it's not really all together and different reports don't really have all that info you run into this weird case where you can't actually so you have estimates from daily reports you have data by country or by region i should say from financial reports and then you have a lump sum total that is very accurate but is one and so we actually create a report that uses all of them together to make sense out of them and what it does is two things one it breaks down the revenue the actual absolute actual revenue what you got paid by app and in-app purchase if you have those or four subscriptions you will have those uh but also shows you the differences between what the daily reports say what the financial reports say and also what the actual amount that you got in your pocket at the end of the month and that's what you see on the screen and that's a report that dave has been using for a long time yeah so actually that's what makes sense of all of it before ariel made this super easy um i was paying my app partners and doing rev share based on the daily reports in app figures and i was talking to craig hawkenberry long time uh indie developer part of icon factory um he's like you know those are accurate i was like what he's like there's a payment report and so there was this company appviz and then i think craig took took over part of it after apfez abandoned it um and created this school called he helped them stay keep afloat yeah so they had this tool called bean counter where i would actually go manually download the payment reports import them into bean counter is a mac app and then it would process the payment similar to what what ariel now does without figures and what i found out was that i was i was overpaying my partners because the daily reports don't have the refunds the chargebacks and the other deductions that would come out of it and the currency conversions were different and you know they had all all of the caveats that we've discussed with the daily reports and so i had been overpaying my uh uh rev shares by by thousands of dollars maybe tens of thousands of a couple of years until i figured that out um and so and so i pulled this report up specifically to show how different it can actually be i tried to find a month where the the variance was high and you know this is only fifteen thousand dollars um that was paid out by apple um you know if you're talking hundreds of thousands or millions of dollars a month the spread can be tens of thousands of dollars not just you know a thousand dollars here but if you look estimated is that 12 500 ish and that is the cumulative amount from the daily reports the actual is again what everyone was saying from the financial report is thirteen thousand one twenty five that's supposed to be more accurate uh but then what actually apple actually paid was the thirteen thousand two forty three so you know if i had a paid based on estimated this time i'd actually would have shortchanged my partners um because i actually got paid almost a thousand dollars more uh and so again you know this is probably due to uh transactions that that uh came from the last fiscal month that actually got settled in this month and so they weren't actually transactions in the daily report but they got paid in this fiscal month it can be any combination of of all these things that we've discussed that uh currency conversion you know there may have been a lot of sales in japan and the yen went up compared to the dollar like there's so many different explanations for why this could be but this is why the payment report is the only source of truth that you can have for app store data and part of the reason we wanted to do this uh chat with ariel is that you know we get asked a lot at revenue cat like why can't we use revenue cat data for our accrual accounting we're like no no no no no no um like we track the transactions in revenue cat and provide great dashboard business tools like you you want to know when somebody turns off on a renew you want to see that trial conversion that happens seven days later like you need actionable business data in real time and that's what we provide by managing the transactions and having our back end and building you know we have some incredible charts i i forgot to put a slide in here with our charts but but we have pretty sophisticated charts to track your you know your change in mrr we have like all sorts of great tools at revenuecat to help you make business decisions on a day in day out basis um but the actual hard financial data that you need to do it accounting again can the payment report ariel actually didn't didn't say specifically but it generally comes out either the day of or the day after payment um and so again day of usually yeah so you have a you have a transaction that happened the first day of a fiscal month of a 35 day fiscal month then you have 33 days after and then the payment report comes out so you have 68 days from when a transaction happened to when you have um actual accounting level data and so you can't run your business 68 days in the past and so that's why you know revenue cat we're dealing with the live transaction data and trying to give you as accurate and it ends up being within you know two three percent of the final accounting data um but we just we can't give you live accurate accounting data because it it doesn't exist it doesn't exist until apple actually does the currency conversion on that 33 33rd day after the end of the fiscal month um so yeah it's it's a little crazy and a little little hard to to wrap your head around but that's just it is what it is and i've been using for for payments um this this report in app figures for probably a decade now wes the minute ariel uh added it to that figures i was using it and have used that as my my source of truth for accounting um we're gonna get something so apple does give you data on subscriptions and so it's again very different than what you would see with revenue cat because revenuecat has the ability to look at events in a way that makes a lot more sense but even on the aggregate side that data exists and that's what we look at so that's how we compile those estimates off of subscriptions but again that goes back to they're not exactly on that like down to the penny so really no one has data down to the penny and that's because like you were saying it doesn't exist but one of the things that i think is probably even going to catch more people by surprise at the end of this month when eventually when it gets into the payments report is what's happening in russia now and that's going to be a huge change in conversion rate for the ruble and that's going to be a problem so something to keep in mind yeah um let's i did want to leave plenty of time for questions and we will answer the questions that are that are in the chat um i i wanted to get through these slides quickly and then we'll get to that so uh the financial report that we were just talking about um if you are trying to do um you know to the penny accounting especially accrual accounting or if you need to understand uh exchange rates and book the difference in revenue and and those sorts of things and this is something i just learned this week apple issues a financial report as a um in process a temporary um and that happens uh in the neighborhood of 30 days after the end of the fiscal month but then they actually update that report after the payment is made and that final final final financial report will instead of saying uh estimated proceeds it will actually say um uh it will actually give the payment amount and the the payment total and the payment bank uh and when you see that payment total and payment bank on that report you know it's finalized and if you look at this list of reporting fields you do actually get data on on tax on adjustments on withholding and you get the exchange rate so this is the report where you can actually go in and country by country figure out so all the transactions that you do get data on and we'll get to that in the next report but uh you can actually back into an accurate uh exchange rate once you get the final final final financial report that has these rates in it uh anything else you want to add ariel well the actual actual actual uh conversion rate is also in the payments report or in the payment report from apple so when you do eventually get the real real real amount that they used for that particular region to convert that amount of money and they show you the before and after and the after it will match what in what is in your bank account 100 so you do have that eventually the question is just when yeah and then this is the payment report and this is the report that um the app figures uses to to generate that screen that we just saw before and this has actually been enhanced a lot in what like this just the last four or five years apple has actually taken a lot of steps in the right direction of giving more data so that we can do more precise accounting um so if you look at this you have a transaction date a settlement date sku apple identifier you have all this information um and this is the payment report again that gets sent once you actually get paid and this is the report that's actually like penny for penny exactly what's listed and they give you every single transaction that happened in that month including the refunds and other stuff that would make adjustments and so if you're trying to do transaction level accounting to the penny this is a report that you need to look at um and we'll go to the next one this is something that blew my mind i just found this out like a few weeks ago when i was digging into this if you take that if you download that report drop it into excel or whatever and you create a row a column for time to settle and you do the time calculation from transaction date to settlement date it can take 38 days for a transaction to settle that's you know going back to that very first slide that we're looking at it seems so simple customer pays you charge the credit card developer gets paid so 38 days can span multiple fiscal months um fiscal months with apple are either 35 or 28 days so this could have happened in the january fiscal month spanned the february fiscal month and actually settled in the march fiscal month um and so i didn't i didn't go through and list the entire um uh uh spreadsheet but you know you have quite a few that have these long transaction time to settle uh but then you know the the bulk of them are settled within uh 24 to 48 hours so you know these are the exception but when you're trying to do to the penti accounting and then especially we'll talk about in a sec accrual accounting um you know these are the things that that really screw with the numbers um is how long it can take one interesting thing too and just anecdote this number 21 here is a paid app which is why the sku isn't a typical like in-app purchase sku this is one of my paid apps uh group text and i would have never thought that a paid up front app could take 10 days to settle but sure enough so this is an app that somebody you know hit the pay button went through the process you know double click the the home button to or the side button to to confirm the transaction they downloaded they use the app and 10 days later is when the money actually left their bank account and hit apple's bank account on a paid app uh and again the the ones above you can see are annual subscriptions um and and annual subscriptions with free trials and whatnot um and so this this just blew my mind downloading this detailed financial report and doing some math on it one thing that i think not enough people know is that when it comes to credit card transactions it's not a direct money is coming out of one bank into another at all especially as it gets to the international level so money comes out of one bank and goes to another bank that then usually goes to another bank and it depends on who issued your credit card and the company that is charging your money so apple in that case the the gateway that they use and how they're connected to all the banks and normally it's not them that are going to clear this transaction so it has all these hoops to jump through and when you're thinking international just multiply that by by a bunch and so you really the the money is jumping from one to another to the point where taking 10 days is like not absurd it doesn't have to mean that it was something like crazy like a credit card declined or something like that but that's probably what it means but still it's like it's so long but apple makes it so invisible which is so cool and i run a subscription business that doesn't use apple's platform for for making money and i don't use stripe or any of those because when we started those didn't exist almost 13 years ago so for us we built everything from scratch so we know all these things and we have to deal with all these things and we have to do the we are the ones to be trying all these transactions and it's such a huge headache so having that kind of happen under the hood is so nice yeah and it's nice that apple's gotten and better at reporting it as well like we're getting more and more detailed reports that you can do better accounting um i forgot to ask you earlier tell us about because i actually this is going to be news to me um about how apple handles uh dates like what is a day so that's probably one of the most asked questions when people start using us or when people even people who have used us for a long time sometimes don't even know this but apple has its own concept of a day a day is not a 24 hour period globally and it kind of makes sense but the idea is that how they charge with different regions being the places where they collect the money those places get to take their own 24-hour period that becomes their day the problem is so for example in europe a day is a day that makes sense in europe hour-wise where in the u.s it's a day that makes sense in the u.s hour-wise same for asia same for other countries so how do you report multiple different kind of time zones into a single time zone that is not utc what apple does is it takes all those different 24-hour periods and squashes them into one date that does not have a timestamp so you end up with for example today is friday the day in europe is almost ending the day in asia already ended and the day if you move out west will be ending so when apple reports on today on the fourth they will squish all of those so you're not gonna get an actual one line that cuts across all the countries that is the deadline for a transaction and that usually confuses people a lot and apple doesn't really explain it in app store connect they now allow you to look at data through utc and that makes things even worse but ultimately it is that 24-hour period that gets squashed into one i think it actually makes sense because a day in the if if you're thinking about your revenue and or you're making more money in the day or at night day and night are very different across different time zones so that's a way of doing it right that's fascinating and so they've always done it this way right from yep it's just it's probably based on how they chose to do their own internal accounting when they started the itunes store in 20 2003 or whatever it was um well i mean that also makes a ton of sense because microtransactions are really a great way to save money on transactions otherwise like if you're running stripe simple stripe basic stripe out of the gate you're probably paying three and something percent plus a 20 or 30 cent transaction fee on every transaction so if they had to charge 99 cents with a 30 cent transaction fee the world's not going to be where it is today and lump them together and that was a great idea today that gets like done automatically by a whole bunch of aggregators but back in the day that wasn't a thing so i totally see why this would make sense and save everyone money yeah cali um actually i didn't even know that apple was aggregating days in that way um which now actually makes a few things make more sense i should have known that you know 14 years in um we have an algebraic article about it i'll give you a link yeah thank you real quick a little breaking a very esoteric news here apple is working on a transaction tax report uh when i was digging into the docs this week i found this do you have any more details from apple about what this transaction report is for and going to be and when it's even unfortunately not really the thing is apple rarely says they're gonna make something happen usually they don't say anything we might get a hint because we know people who know people but a hint nothing even beyond that and that's it so i i'm not entirely sure why they have it up there i'm not entirely sure why that c is not capitalized because it's really hurting my face but um ultimately this has been probably one of the most requested features from especially from the larger developers who are paying a lot of money in taxes and there are a lot of different tax regulations that companies now have to worry about especially as you think about international and the way google handles it is by just saying if you want to take care of it yourself just go and do it we're not going to touch it brazil is a big country for that and a lot of game companies are now opting to not let google handle taxes in brazil and they do all the work because it's so complicated so i think that's the reason behind this coming up and i i hope this will be what we're all hoping for and we can take this and bring this into our reporting and make that payments report make even more sense gotcha awesome and then the last thing i did just want to touch on and i probably should have touched on this earlier but part of the reason all of this is a problem is that a lot of companies especially larger companies need to do what's called accrual-based accounting so cash-based accounting this is how i've run my business how a lot of businesses run is it when i get a payment from apple march 3rd it is for the january fiscal month but i record that as revenue on march 3rd and that money hit my bank account march 3rd um you know to to the irs to everyone else it's it's money that hit my account on march 3rd it doesn't matter that it was from january it just matters that i actually received the money in march and it's so simple i mean you know i have zero the the the financial sas tools set up to automatically import everything and it takes me like a few hours a year to run my all my accounting for tax purposes because it's all just automated into xero and i just do all cash base i just assign categories to the transactions it's when the money leaves my account when the money comes into my account it's so simple now larger companies need to do accrual based accounting which means that you want to record the revenue the day the transaction happened and so now if you think back again to the very first slide and then everything we've talked about this whole time is that if a transaction happened the first day of january's fiscal month which was actually december 26th and you didn't have accurate financial data on it until march 3rd trying to sort that out of what revenue actually transacted on the 26th of december when that that refund actually you if you get a refund what was that transaction that it's actually related to um and you're having to go back and fix your december books if you're doing a calendar-based accrual accounting you're having to fix the first books in march because you don't have accurate data for december 26 until march 3rd so this is a huge huge hassle and i've talked to multiple you know large apps i think there's some folks here in the chat that i've spoken to about this um and and you know apple's making it easier and easier app figures and and revenue cat were both you know everybody's exploring ways to help make this a little bit easier but the bottom line is it's just a huge hassle yeah absolutely most of these big companies end up using our api so they can get they can get all those different columns from the payments report so they get the estimated and that's used for just to get an idea of what to expect and then they bring in those financial reports as soon as they become available at the slightly estimated stage before the conversion rate and everything that makes more sense and then at the end you automate that with the api so it all comes down with the payments report and then everything makes sense but yeah it's not an easy process and we work with teams that are built around clarifying this internally in very big organizations and they really depend on this because without this it's really problematic yep all right well the uh 15 minutes of slides i prepared took us 50 minutes to go through ariel and i like to talk and uh it is a rather complex topic and so hopefully we've gone into enough detail but not completely bored everybody out of their mind um i let's jump right into questions and um i can go over uh the hour if ariel if you need to bounce on the hour totally cool but i'll try and answer as many of these questions as i can as we go through so uh start live answer um what happens with chargebacks customers cancel a charge via their bank i'm going to send this one to ariel oh i'll take this one it's easy the money gets taken from your total so because what apple does is they basically build kind of your your own money your own uh accounting of money they can take money from that until they pay you and so they will take that from you and not pay that to you i believe they have rules around and they fight chargebacks fiercely so it's not really as easy to do a chargeback unless it really really makes sense but when that happens they'll just take the money away from you and from the accounting side and payment report side a chargeback is basically treated as a refund correct so in the payment report it will show up as a refund and as with other refunds it gets deducted from and shown in the transaction list in the payment report exactly gotcha um and feel free to ask follow-ups i'm just going to go through starting from the earliest question and go through because it is a confusing topic and we we tried to cover everything how can you see all of those amounts meaning how can i see total settled tax fsi refunded amount currency conversion net amount i want to know how i can see the gross amount that relates to the net payment we're receiving we've been able to we haven't been able to find this report so i think we answered that question uh and feel free to follow up but that payment report um so app figures will will automatically download that and aggregate it for you into that payment report that we showed with my personal data in there and and i didn't bring this out at the time but um i love how app figures even has uh the individual in-app purchases listed um and so apple does provide at the transaction level and the sku level data um and so so i'm able to see in the app figures payment report how much of that payment is coming from my lifetime subscription versus the annual subscription versus the monthly subscription uh and that's and and those are the hard numbers from apple uh in that report um if the level of details in app figures report is not enough for you then what you do and and i did this in the last month preparing for this chat is that you go in for the first time because i've been relying on app figures for more than a decade to do this for me uh you go into i'm making me blush you go into app store connect and you um download it there and you get this massive csv file that you can then you know use it like an etl into a data warehouse if you want to be more sophisticated and do kind of what ariel's doing but with your own kind of custom needs dump it into excel and sort and create columns like i did to calculate the time to settle but that report does have every single transaction listed with that transaction date and then the settlement date um and and so this is where um you know revenue cap we have looked into um taking those financial report or the the final payment report in normalizing it against our transaction level data but again for the reasons ariel discussed um normalizing those two is is is probably impossible because we're getting the time in utc and um and trying to match those back match those into the payment report which just gives you the day that happened instead of like a time stamp for when they happened um it is tough and and then um and i'll go ahead and answer this uh i think somebody asked it later um so the apple does not send transaction they send transaction level data but they don't have any kind of a identifier on that transaction where you can tie that back to the transaction that actually happened and they do that for privacy reasons i'm still a little confused about what's so private about the payment data that they couldn't provide some sort of transaction id that ties it back to the original transaction um but for privacy reasons they don't let you do that so so again it's like you can match to the day the original transaction and the or like the actual like transaction data to the payment transaction data but but with time zones and all that other stuff trying to match them perfectly you're never going to get one to one you could maybe get oh well 28 transactions happened in this day in the uk and and then in the payment report these 28 transactions happen but it's um yeah it's gonna be difficult to get that to a hundred percent which is why we haven't built it and then of course uh app figures doesn't actually have the transaction data um that we developers have as far as the the app store receipts where and it shows the renewals and you know we have all of that data as revenue cat since we manage the transaction and then uh continually refresh that receipt using apple's push notifications and then the polling feature uh so we have those individual transactions with all the details of all the renewals of all the grace periods and everything like that but again matching that to the actual yeah you can't play them is is is at fool's errand at this point yeah unless apple you can get really really close yeah but close is not good enough when it comes to money that's where we usually draw the line yeah um so leo asks for a sas subscription business is there a way to send people to pay on my site and bypass apple's 30 percent absolutely um so again as as we discussed you know you can use stripe you know ariel runs his business outside the app store and can tell you all the challenges of of managing all that stripe has made it way easier you know there's other payment providers braintree and others um you know there's whole other you know uh uh webinars we've done and and blog posts about this apple does have very specific rules around what you know who you can send off the app store um so it's possible and revenue cap again we we actually provide sdks to do that with stripe and we have other payment providers coming up coming um but for all the reasons we discussed and i know i'm like you know probably think i'm super biased being from revenue cat but um with apple managing the taxes the withholdings the compliance and everything else um and then also it being so easy for them to just use their face to pay i think people really underestimate just how much of a conversion rate drop you're really going to have pushing people to web payments and even if it was inside the app with a credit card it's just a different ball game but i will say stripe is actually getting going deeper and deeper down this rabbit hole they acquired a company that does tax reporting they don't yet collect and remit payments but i can imagine that might not be too far off so i think over time this is going to get easier and easier and one of the things i'm kind of droning on at this point but it's just such an important topic but you know as ariel was talking about just a few minutes ago when he started in 20 2009 you think oh it's so easy like you just collect payments and just you know stripe on their website it's just like two lines of code to collect the payment it's so easy even to this day you know stripe makes things so much easier braintree makes so much things so much easier um but they don't solve everything end to end and they even don't solve some of the accounting things in the end the way apple and google do and again apple probably better than google uh these days um but if you are going to collect on the web just be prepared to either be knowingly you know breaking local laws in some regions or um you know find something you didn't hear this from us [Laughter] yeah i mean i was just you say you know it's up to you uh so talk to a lawyer talk to an accountant and if you're collecting on the web you know use use something like stripe and then use there are tools in stripe that you can use to help make some of this more simple as well but it is a big hairy mess do you have anything to add to ariel uh i mean we can talk about this for days we just added an integration with stripe for the exact same reason because we see more developers are trying now this and with everything that's been happening with apple over the last almost year it's inevitable that apple will open up the stripe but now it's nearly impossible only a few different apps can do it and under like really crazy conditions and and i've covered that on my uh on my various live streams of the potential that really doesn't exist in my opinion with that but it has to change i give it 12 to 18 months and we'll see a big shift and then it will become possible hopefully by then stripe will have some solution that is a little bit more tailored for these kind of use cases which i know that they're working on yep all right um rachel asks for sub transaction data sent by apple do they have the practice of revising data retroactively um yes go ahead absolutely the thing is so we look at a lot of data from a lot of developers small big and everything in between and for the most part they don't change the data retroactively but once in a while we'll find something that makes absolutely no sense triggers all the all the alarms on our end as far as data stability and we'll talk to developers be like this makes no sense i didn't do anything and i see this like massive increase or massive drop and that happened i want to say in the beginning of february there was a day that was just a huge dip for everyone and we talked apple about it and they got it fixed so it doesn't happen too often and when it does apple is really good about fixing it but it does happen from time to time this is what i'm curious about so so like at revenue cat since we are dealing with the transaction level data and we're refreshing the receipts you know if a transaction had gone into a grace period and then actually failed you know 10 days later or whatever it is that transaction gets updated in our database and it has the entire chain from starting a free trial to the apple trying to convert the free trial to going into the grace period to everything um in apple's daily reports and then in the script subscription data they do give you what happens when somebody is an active subscriber for 10 days while that transaction is pending and then they actually aren't a subscriber anymore does apple and maybe this is part of this question is does apple retroactively consider them no longer a subscriber never having been a subscriber or do they are they a subscriber for those 10 days and then they like is almost like a cancellation do you know how that works yeah so that gets extremely complicated but actually works kind of well so apple under the hood has all these different classifications for where an active subscriber is in that long kind of flowchart that you had before except for subscriptions it gets even more complicated we're tracking i want to say at this point 70 or 80 different of those labels and that's all the ones that apple has some of those are not at all documented so we have to figure out what they all mean and one of those uh one of those labels or a few of those labels have to do with the specific state when a credit card declined or when a transaction wasn't possible and so they'll go into a billing retry and then from there they'll go into grace and then from there they'll kind of walk through a whole process so you can see on our side all these different numbers and which how much of your user base is actually in a in a retry period or is in a grace period and you can see if they moved into grace from a trial so if a trial was supposed to upgrade and it didn't so you have all this data it's just so much that most people don't care enough about it because it's usually a tiny percentage so we have what we call calculated metrics that lump all of them so we'll lump people who we know are in this process of getting retried and we know that they're still technically active so they're getting access from the app uh point of view and so those will remain active and then when that changes when that clock hits they'll become a cancellation and then they'll get out of the calculated metric so under the hood it's broken down to a bazillion pieces yeah on top you only see what is easy and you can see both on our side we just most of our users don't dig as for obvious reasons and then again on on the revenue cat side because we have that at a per user level where we have it both server side with the user id but then also client side um you can actually with our sdk pull the state they're in and if they are in a grace period or if they're in a trial uh you can you know put a little flag up there saying you know hey there's trouble with your payment and explain how to fix it you can send a push notification you know saying hey your trial is going to expire because your your transaction uh is in the grace period so you can actually in near real time be able to kind of trigger these win backs at an individual user basis you know a lot of people use email for that as well and so with a tool like uh iterable you can take that um that grace period web hook and then fire off some kind of win back on that since we do have that customer level data so i think we've like answered this question pretty well um so google pays in 30 days uh that's one of the questions google pays in 15 days correct um yeah so they'll pay within within that area i would say so in less than 30 days would probably be a very safe way gotcha in their in their docs they say they pay on the 15th after the end of each uh calendar month so the 15th of every month which is so much more simple like we showed in that calendar and then and um but you're saying that sometimes it's the 17 sometimes it's the 18th sometimes they ever pay the 13th or 14th it just kind of i don't think so okay it usually is a little bit later but you can expect it around the 15th from what i've seen one of the things i've been surprised at with apple is that they always pay exactly 33 days after the end of the fiscal month and because i have the data and because i uh so i actually went back and looked at all my bank transactions and i have a blog post where i i give the specific dates where this happened but i believe there's only been five times in the history of the app store where apple didn't pay exactly on the 33 days i think two or three of them were due to that day landing on a holiday and then a couple of them i swear i think apple does a little bit of financial engineering here and there where they pushed a payment into the next fiscal year to bump their services revenue in the next fiscal quarter instead of the current fiscal quarter um and uh so but it just blows my mind that in 14 years of payments now there's only been like four or five times just a handful of times that apple hasn't paid exactly 33 days after the end of the fiscal month apple does a lot of financial engineering like yeah well it's so clever it's so clever one of the things about it uh i actually tweeted about this recently um and you and i had a chat on this on twitter so i published our blog post in the fall about apple's 2022 fiscal year and then in january somebody pings me on twitter and they're like hey your fiscal calendar's wrong i think no it's not like you know i've done this multiple years i've watched the fiscal calendar for a decade now like it was right i'm like no no no it's wrong and so i think somehow you got tagged in the conversation or i asked you about it and turns out in december apple updated their fiscal calendar so what was going to happen um apple's fiscal year only has like 364 days or 360 days or something like that because of the way they do 28 day and 35 day fiscal month and so every five to six years they have to add a whole week to realign the calendar so like the end of fiscal 2022 is september 24th which is really awkward um and so to realign the fiscal calendar to the monthly calendar apple has to add a week every five or six years which is bizarre so the original 2222 fiscal calendar had an extra week in the december fiscal uh month and my guess and and is that it was financial engineering because they had such a strong quarter and they knew they were going to have such a good quarter that they pulled that fiscal month out of december and they're going to add it back to next december so the fiscal 2023 december will likely have five fiscal week five weeks in the fiscal month instead of four um and and you know i'm gonna follow up on this in 2023 because it's gonna be interesting to see how what their services revenue does like year over year uh it's something a lot of uh financial analysts don't even pay close attention to of how apple can shift revenue around uh with these fiscal weeks and the fiscal months and the payment dates and things like that i don't know if that was what they did this year because there's an actual pattern if you look at it over years and that's how we discovered that um so they had a calendar in app store connect it was just wrong and when we discovered it we one we asked a bunch of different people at apple about it but at the same time we put out our own with the dates we knew we thought were right um and they have a pattern for when they add that extra week and that pattern matched to next year not to this year so yeah i don't know if it's maybe it's like modified financial engineering or like templated financial engineer like something was i don't know but yeah template so from a calendar standpoint makes sense from a calendar standpoint it actually makes sense to do it in 2023 as well because it lands perfectly on january 1st starting the 2023 q2 um so it doesn't make sense calendar-wise but it was just weird how that all went down like i like how does apple post the wrong fiscal calendar and and what funny thing is absolutely connect i don't know it's one of those places they pay less attention to i think maybe yeah anyways we we can uh i don't think anybody wants to hear us debate the financial engineering let's move on to questions um i'll invite you to my live stream to do that okay we should that'd be fun um simon asks revenue cat charts don't handle vat well will that be fixed uh i know it's something we're looking into and if if you take the context of this entire conversation you probably understand why it is actually very challenging to handle these things well um so you are absolutely correct we don't handle va too well and it's something we're we're trying to solve but given all these complexities it is a challenge so i can't promise when it will be solved um but we're aware uh and and and wish it were easier to handle this better um dylan we're running a paywall a b test with amplitude however we can't compare the refund rate because remedycat does not send the refund event to amplitude right uh we do actually um so um why don't you get with me or our support team uh offline and we can talk i don't know all the details of exactly how it does but it does uh so uh let's email me directly or jump on our community and tag me and we'll get this answered for you next one we're getting a lot of revenue cat questions today but i mean this is this is part of why we're doing this webinar is that like it is really confusing all the different financial aspects of what we handle versus what gets paid uh why do some revenue account users uh auto renew with a price of zero does it mean they have a subscription for free i never offered a subscription at that price um that's another question for our community i'm not sure i'm pretty sure there's a reason um but i i don't have the answer off the top of my head glenn asks can you actually see the currency conversion that apple uses as far as i see you just get the transactions in the local currency and the payment reports so we covered that one earlier apple does eventually it's just that since they don't convert it until the payment date they can't give you that data until they actually have data and have actually converted the revenue bryce asks with this report that you are showing where can i see the detail this is still showing the net revenue where do we see the gross amount um so so again the we we got to this later i think is that the payment report is where you get the transaction level data for the entire penny accurate and again it just doesn't come out for until the 33 days after the end of the fiscal month um daniel asks there seems to be a catch up every three months for actual revenue on the app store what drives that this is the fiscal month and this is what's so confusing and um when when i was solely reliant on um app store revenue for paying the bills i love apple's uh 35-day fiscal month because you make more money um you know what's the i don't know off the top of my head the exact percentage difference between 35 days and 28 days but you get a whole extra week of revenue in those months and so it's not a catch-up it's just that their payments are for a 35-day month instead of a 28-day month and and again um if you check into uh if you happen to use app figures you you see that data in the payment report uh and then you can use our calendar or ariel's calendar to kind of match up where those payments are coming from um i should add that the payments report has a calendar built in so when you ask for the may report for example you get the actual fiscal may report you don't have to do any of that um kind of ninjing around that we also give you the ability to look at the financial reports by the month that apple has which is a regular calendar month for those financial reports in the sales report so you can do that too and then align them which is what happens in payments by default if you want to go really crazy you can really download those reports directly from the archive which will give you what you would get if you had to go into app store connect and then drop them into excel and start having fun but i don't know who wants to have fun on excel on a friday evening so if you do it's possible um is it possible to get payment in euro instead of uh pounds do you know that ariel not off the top of my head but i think that's more of what apple decides based on your bank right yeah i think it's that you would need to set up a bank in in the eurozone um to be able to accept euros instead of pounds yeah yeah yeah and like i set up a u.s account and i've always been paid in in dollars um and so yeah it depends uh and it this may get complicated though because if you're registered as a uk entity and pay taxes as a uk entity they might not actually allow you to set up a euro denominated bank account um but so that that would actually be a good question for apples uh and you know one thing a lot of people don't realize is that apple's support on this kind of stuff it can take a while to get here from them but they actually do have decent support when you if you ask these kind of questions and say hey i'm i'm in i'm in the uk but i want to get paid in euros is that possible you will likely get a a good answer of how to actually do that but my guess is that it's going to be tricky if you're a uk entity doug asks does detailed financial reports show every transaction as you said or is it consolidated it does show every transaction the nice thing is it shows every transaction but you do have a column for sku so that you can as as app figures does actually tabulate individual sku level totals and then total all the skus up for the app totals um kelly that jumped around kelly asks why don't why doesn't apple enable individual transaction ideas that would allow transactional level of reconciliation uh there is no solution for this issue and i mean i have talked to apple directly about this and the answer was privacy i it doesn't make sense to me because you know revenuecat we have all this data at a user level like if you're running a business and you have customers you you need to know that customer and like you know when when i buy something online and i give them my home address and my credit card they have my home address and credit card that's not a privacy invasion that's necessary to transact and do business with a business and so safely at revenue cat you know we have because we manage the transactions inside the app we have we facilitate that and have the transaction level data and then by updating those receipts server side we have every single thing that's happened so we know you know again if it's gone into grace period we know at an individual user basis so so when your support team is talking to somebody who says hey why am i not getting access they can actually pull up by email or or we can have we can also use anonymous ids and there's a little hack because i like to keep things anonymous and i don't collect email although i should start collecting email but there's a little hack you can put in your app in the settings where using the revenue account sdk you can actually grab that anonymous id so when they start a support request you can grab that anonymous id and then you can search that anonymous id in revenue cat and actually get the transaction level data and see oh they went into a billing grace period and then it failed and they just need to go back into the app store and renew um and so it's like and this is not like massive privacy invasion this is like you're doing business with a company that needs to know whether you've paid or not and needs to know the status of your transaction and needs to know that on a user-level basis so that they can grant you permission to use it so that's another thing revenuecat does as well is that we handle we have what we call an entitlement engine and so when somebody pays you can use a revenue cat sdk to determine what level of access they get they get you know in some of my apps i have multiple in-app purchases in addition to the subscription and so with with the revenuecat sdk you can grant those individual features individually when they've paid on those and then when they get refunded you can take them away when they're a subscriber they get access to this when they're a lifetime user they get access to that um and so it's like this is data you need to have it's not some massive privacy invasion and so i just i i guess the only thing that i can the only thing i can think is that is that you know if somebody's using a vpn because they want like absolute privacy the payment report will give you their state so like you could know the state they live in and so but yeah it's it is definitely a source of frustration both for ariel obviously and then especially for us at revenue cap because we would we would love to be able to tie our transactions to the payment data directly uh by apple for privacy reasons doesn't allow that to happen well like a tiny thing to add on top of it is all the way up until subscriptions it wasn't that necessary like you'd want it because that's how you make better decisions and that's i understand the life cycle a little bit better but with subscriptions you absolutely need it it's no longer a matter of just oh it would be nice to have and so i think eventually maybe we'll get a little bit more from apple they're a little bit slow when it comes to these sort of things so give it some time but they've really upgraded and updated a lot of the infrastructure related to subscriptions a ton over the last like two or three years the types of data that they've been giving us have really expanded we started with maybe 10 or 15 different um those labels that i was talking about before those metrics and now we're up to 70 or 80 it's possible it's even more so i imagine we'll see more of this in the future yeah i don't know when i'm looking forward to it though someday hopefully 14 years in we're still like crossing our fingers hoping apple like gets their stuff together i don't know i'm super excited about the last couple years and in the app store so much yeah they really have been changed yeah yeah it's kind of like a renaissance in a way of things so who knows yeah uh so then carlos asks um and this is a valid point as well so revenue cap data is is two to three percent off from the payment report if it's primarily us-based if you have more vat customers again it's because we aren't properly in revenue account handling vat and again something we're working on so the answer is yes we're aware and we will we're working on it um camilo what happens with payments when apple decides to terminate your developer account do you have any experience with this ariel have you worked with any customers here directly i've heard from a few it's never good though never good it depends why they terminated the account it's always a matter of why apple doesn't really do anything shady it all has to apply according it holds to go according to some sort of rule that they have in the developer agreement so it really depends if they decided that you were defrauding them in some way or doing something that goes against the terms then all those downloads technically go against the terms so you're never going to see that money in most cases you don't see that money but again it really depends on why it was terminated yeah that makes sense i've always been being curious like all these all these apps that get pulled from the app store uh for fraud and stuff uh anecdotally i've heard they don't automatically like refund do a lot of refunds and and that's tricky because a lot of it has already been paid been paid out but if they terminate an account and don't make the final payment i would hope they at least refund that and apple doesn't just keep it as part of like some kind of a slush fund yeah from what i know they really operate the same way across the board so when an app is pulled yeah that's where it ends well that's what i think and it's it's another one where i guess we we need to find somebody who's had their and i guess if anybody here knows somebody put him in touch with me or ariel um i would love to know yeah i would love to talk to somebody who's had this been through this experience and find out you know if there's refunds done or and if you get a final payment those kind of things and like ariel said though it's probably different depending on why you're terminated so if you know somebody has been terminated for cause that would be especially interesting and ariel if you need to jump i mean i i want to try and you know i'm still with you i got a few more minutes all right uh we do accrual accounting here i was wondering does apple charge the card on time of transaction and pay us later or do they actually charge the card later after the transaction date and that kind of well it was uh is it it's a very frustrating answer that we talk through in multiple ways during the presentation but um the answer is that yeah it it it's indeterminate uh from the transaction happening and when apple actually charges the credit card and and for you know dozens of reasons uh that things can get delayed um jonathan asks it sounds like most smaller app companies are using cash basis accounting is that correct if so is there a revenue threshold at which sas companies will cross over for current accounting is it hard to make the switch from cash basis to accrual basis um i've always operated cash basis i've recommended it to everybody i talked to again i'm not an accountant i'm not a lawyer i i shouldn't give this advice uh publicly um but it is just simpler um and so um do you know eric like what are the specific reasons a larger i guess you know publicly traded companies are pretty much forced to do accrual-based accounting so a company that's headed toward being coming public a company that that uh needs their accounting to be that way for specific reasons um yeah can you speak to that more ariel yeah so i'll preface it with i'm not an accountant or a lawyer or anything of that nature but you don't have to be a public company to go accrual i think most companies that are slightly more than individuals most companies that are actual companies that have a lot of expenses or have expenses and have a team and have payroll and have taxes and all that that will usually use accrual we um i think we use the cruel like almost right in the beginning because it makes everything it is a little bit more complicated so you would need to have an accountant and you don't want to do that by hand because that becomes a mess but if you have an accountant it shouldn't be that difficult if you don't have that many transactions but the benefits are one you get to have a much better more flexibility with your taxes which hopefully none of you have to worry about it but if you do have to worry about it you want to have that sort of flexibility especially when you make a lot of payments so if you have a team and you're paying payroll payroll taxes if you have an office space or you're buying a building or you're doing any of those things that require big larger amounts of cash you want to be able to recognize them when they make the most sense for your books as opposed to recognizing when they happen because it doesn't always align if you for example get paid by someone who isn't who's not directly from the app store so if you have accounts that pay you let's say for a year in advance so an annual subscription even can be broken up and if your fiscal year is not exactly the calendar year for that particular subscription you don't have to pay taxes on that entire subscription so on a hundred dollars you may only need to pay taxes in the current year on fifty dollars and as you grow that becomes a lot more relevant i don't even remember the days of doing cash basis so i would say you don't have to be big to do it but but but it's so much easier the the other the other benefit too of accrual base accounting is if you use your accounting data to run your business so like um if you know if you're trying to figure out you know your ad spend in january was x and your revenue was y and you're trying to understand that at a you know to the penny level then doing accrual-based accounting you can use your books to better like understand the ins and outs of of the flow of money and again and doing it in a way that's convenient to you versus just waiting until things get paid to register and so that that is one thing about cash-based accounting that is a downside so uh for all the hassle of accrual-based accounting you get more insight into what's actually going on with your business so like when when it says that in march i was paid x in my accounting software i know that i that that money was not actually made in march it's just that i was paid in march and i don't use my books to analyze my business in that way but if you're spending in january and you want to know how much you actually revenue you actually generate in january yeah it does make sense but but because it's such a big hassle it's like you need to at least be at the level where you can either hire an accountant or have somebody dedicate real time to it because it's a lot of work a lot of work absolutely and then and then for all the reasons we just discussed trying to align apple's fiscal um uh months to calendar months to do accrual-based accounting is a lot of work yeah you need a bookkeeper probably too if you're in that boat and you want to do it right um i have to to leave but i think the next question i think i can answer the next question okay yeah yeah so is it possible to get apple to recharge a user after they've given the user a refund for a service they actually used and the answer is no i don't think anyone can make apple do anything when it comes to subscriptions or in-app purchases or anything like that which is why the new apis that now apple is starting to acquire so you can enable people to do more about your subscription from within your app why that's so exciting you're kind of cutting out the whole can apple do this can apple issue a refund can they undo a refund and the answer is no to all those but now there's a little bit more access to users on this happy note i think my time is up is there anything else um i can answer quickly before i leave no thank you so much i'll go through these questions and then um yeah we'll have to do this again sometime too and i'll have to i'll come on i'd love to see you on my side yeah absolutely but thank you so much for your time ariel and thank you for going 30 minutes over having me on this a big topic so uh yeah a lot going on absolutely yeah and if anyone has that i can answer you can find me on twitter fairly easily uh and a lot of people have my email at this point because i send a ton of newsletters so if you want to ask me a question i'll be on twitter ask away i'm pretty chatty as you might imagine at this point me too all right thanks so much talk to you soon bye everyone all right well he's leaving i'm gonna i'll stick around and and just try and get through all the questions um glenn asks i've read that some countries are requiring annual subscriptions to be funded on a per rata basis how is this going to affect pricing versus monthly versus annual subscriptions now this is a fascinating topic the answer is it depends and we don't know [Music] it seems as though apple is intentionally making it a little harder to get the prorated refund and so then it just depends on you know how many consumers actually jump through the hoops to get that prorated refund and then i think it's going to matter to kind of how much churn you have uh how dependent you are on the the annual subscriptions um and so i think the the answer to this is going to vary uh depending on retention i think if you look at a company like um netflix um where you know probably a majority of their customer base just stays subscribed and you know like to me it's just like you know i don't have uh cable anymore i just subscribe to like three or four uh streaming services i'm gonna stay subscribed i have no intention of ever canceling and i'm not the kind of person that's gonna cancel for a month and then get back on and then cancel and get back on um you know to save ten bucks here ten bucks there um so i think you know companies at that level are gonna be much less impacted and and this part you know netflix doesn't even offer an annual subscription anyway um but you know a lot of developers will charge um you know 40 to 60 percent less on the annual subscription to make the pricing look very attractive compared to the monthly to get that money up front which is is um nice from a revenue standpoint that you can pull that revenue forward um and then there is typically more monthly churn so if you charge on a monthly basis um you know the we're going to get some benchmarks out in the next few months but um you know by the end of a year you generally have less than 50 on a monthly subscription but but you'll have in the ballpark of 50 on an annual subscription on the renewals uh and so i think you know there's a lot of kind of um reasons why that is you know people who are willing to pay the annual subscription probably have a little more dedication people who are using the monthly subscription are maybe just you know wanting to to try it out and you know pay the five bucks or 10 bucks or whatever your monthly subscription price is um so so each app is going to have to figure out that balance and they're going to have to look at you know how how much better conversion are they getting by making the pricing look attractive for the annual um you know how important is having that revenue um all at once versus over the months and then look at you know once these things start to happen you know our customers actually using it in mass so if it's you know five percent of your annual subscriptions end up getting refunded um that's probably small enough that whatever was working for you on your annual versus monthly pricing is going to continue to work um so i kind of think it's um not going to be a big deal and not going to change strategy very much but again there will be some apps like if if the app is heavily european focused versus the us um you know if you're if if you know like a lot of apps or like 60 70 percent u.s revenue uh and so then if it's five percent of subscriptions get refunded and that five percent is of 40 of your business and it actually is just a few countries it's not even all countries uh in europe uh and then globally so you know it may be five percent of 20 of your revenue um and so i kind of think it it you know we'll see what happens but um i don't think it's it's kind of earth shattering and gonna make you know big dramatic changes consumers are gonna have to like learn about it they're going to have to jump through hoops to get the refunds but ultimately i think things like this are fantastic for the subscription economy broadly because the more comfortable people are in the subscription model the better off we all are so yeah we're gonna you know take a little bit of a hit uh when people do get that refund and apple does pull the money out of your next payment and for everything we were just discussing it's going to be another kind of um accounting nightmare actually having to uh you know go into the payment reports and figure out these prorated refund amounts um so it is going to be a hassle but ultimately i think it's fantastic for consumers to feel comfortable uh about signing up for an annual subscription so i broadly i'm in favor um yes it's gonna potentially change some tactics in some countries uh depending on how how much fraction it gets uh jonathan says so from our point of view chargebacks and refunds look the same and effect on cash flow timing would be equivalent whether they take talking chargeback or refund yes that is correct so um they're essentially essentially the same thing and and um you know as as with refunds whenever the chargeback does happen um in the fiscal month that it happens is when they deduct the revenue so you know if something was a three or four month old transaction and apple will go back pretty far and offer a refund as ariel said they fight chargebacks pretty hard but if it's a refund from three four months ago it's gonna come out of your next fiscal month's payment um i hope that answers that uh peter asked how can a s how can a sas company recognize an apple user initial subscription on a google device or vice versa um so this is where revenue cat comes in you know our uh platform is specifically designed to simplify the cross-platform subscription management and so there's a couple of layers here as i discussed earlier we have the identity manager we have the um entitlement management of of we're kind of the source of truth for who has access to what um and then we have uh what is now version three because we've learned so much and as we've scaled and seen more kind of edge cases at scale we've been able to uh tackle all known edge cases at this point but by using revenue cat and creating some form of customer id so if you collect an email on the web and then force them to log in on the device um if on android you collect a an email and a login or something like that that's the most straightforward way to do it if you don't want to force a login for the subscription there's some kind of hacky ways around it where you could um you know have them from the android device push their their anonymous id and get access on an apple device and with the forthcoming revenue cap pay product that we're working on to make it easier to take web payments um we are working toward um having a solution where you don't have to force a login where they can pay on the web and be redirected to the app with that user id intact and then once that web payment is attached to that um app store account then it it it's stays with that account um so that kind of stuff does get really tricky but again it's it's you know why revenue cat exists is to help you manage those and and again forcing a login is the easiest way to share subscriptions across platforms uh but there are ways around it uh andrew asks can you explain the anonymous user and alias in revenue cap better for us we have trouble keeping track of actual subscriber counts compared to the app platforms oh um this is uh you know what this this is probably one better for the community or support um it's it's it's a long answer um the the aliases and anonymous um you know while you can and i do this in my apps using anonymous ids does create some level of of uh confusion in in and and this is where you know kind of following on the last question where our identity solution comes into play is that there's even stuff even if you have a login where people share apple ids so for a long time like my wife and i shared an apple id so i could pay for calm and log in with my email address into calm and then my wife gets into calm and she has my app store seat because she's logged into my app store account so calm sees her as a valid subscriber even though she's not logged in to my account um and so those things get really really tricky especially because people do like to share apple ids to so that they can get access to the to the paid um versions i mean there's like like you know friend groups that will share an apple id uh so they can all get access so um so with revenue cap we do have a solution now in our identity management where when you see multiple apple ids when you see different login versus user id where you can decide to grant or revoke access and try and kind of prevent some of that but when when an apple id is shared and you're not requiring a login so you have an anonymous user id and you're relying 100 on the app store receipt you can end up with 10 or 20 people sharing the same subscription across multiple devices um and again we have some tools in revenue cat you know check our docs talk to support i'm not sure if this is answering your question specifically but this is a better question for probably our uh the revenue cat community or we're talking our support to get a little more detailed answer but uh the broad answer is it's uh it you know it is a a tough thing because people do try and and work the system like that uh thomas asks why do we some days get so many billing issues mostly us and australia um that is a great question it's actually something i i've been meaning to write a blog post on just to force myself to ask the right people and get more detail on this um i know that there are specific countries that have higher billing issue rates uh there's specific days that have higher billing issue rates so um you know for example a lot of people get paid on a friday and so if they have a debit card attached to their um app store account and you know thursday they've they've you know hit a few dollars in their account and your subscription is 10. they're going to hit the billing issue if you're renewing on a thursday and then then that's part of why apple has the grace period now so then if they get paid on a friday you know they have the money they want your subscription i mean ideally that's the case i mean you know um and so then on friday apple retries and then the money's there and then there's you know you can use apps app uh prepaid cards some people use prepaid cards to to make sure that they don't spend too much and so those prepaid cards can run out there's a ton of different reasons why these billing issues happen um and at some point i want to do a deep dive on why but but but that might actually answer your question is it i would bet that if you are seeing an increase in the us and australia of building issues on specific days i would bet it's either like a thursday or friday and it's because that's payday and and the billing issues are happening to people who don't have the money in the account all right leonard asks we have a lot of seven day trial users whose trials don't convert after seven days although they didn't opt out do you know why it sometimes takes longer for these trials to convert so that that's exactly you know well part of what i was discussing earlier and part of what we discussed in the webinar um there are a certain percentage and and again we should do benchmarks on this at some point uh on our website on on the blog and uh and we're working toward doing an annual report on these kind of benchmarks but a surprising percentage of transactions and again i'm you know don't quote me on these numbers but but it's in the ballpark of 20 percent uh you know probably somewhere in between 10 and 30 and then it depends on the app it depends on the geography it depends on like so many different factors and these are things that i would love to actually break down in a blog post um but um those for not having funds in a debit card for not having funds in a prepaid card for expiration dates on a credit card for um fraud uh mistaken fraud prevention you know there's there's a ton of reasons why the initial transaction that apple tries wouldn't go through and so then that's why apple has this grace period and these retry and that's why you see a delay in those trial conversions is that apple's trying to collect and actually apple does a pretty incredible job um this is called dunning um you can look it up in the kind of uh sas industry um who's had to handle this on their own for years and as an app developer i've never didn't even learn the word until a couple years ago but dunning is trying to collect payment and so apple has a pretty incredible process for uh continuing to retry those payments um entering into the grace period continuing in that grace period to try payments and they even do smart things like you know trying on fridays and saturdays after payday and things like that so that's why you have a lot of users who actually don't convert on that seventh day is if the transaction enters into that grace period all right last question i can't believe uh how many people are still here almost two hours in but this has been so fun and um there's i mean there's a reason this ended up being such a popular webinar is that it's just there's so much to talk about um the next question can you talk in detail about cross-platform payment and how to manage it um i kind of went over that a little bit ago um you know kind of talking about you know billing on stripe and android and and again we support the amazon app store we're adding more web payments soon um you know again this is really why revenue cat was built is was to manage this cross-platform payment so um the best place to read up on that i think we have at least one blog post and then we we do talk about it quite a bit in the docs um so again ideally you would have a forced login for anybody who is going to pay and then revenue cap becomes that single source of truth across all the different platforms of who paid on the web but is logging in in the on an apple device who paid on android and is logging in on the web um and so you know that is why revenue cat exists is to help simplify managing those cross-platform payments and our identity solution uh can handle it you know most seamlessly if you force a some kind of login but then we have ways to manage it through anonymous ids and otherwise if that's a route you go all right now we have one more question come in um hannah asks where can i find read more about the workflow for cross-platform payments um i kind of similar to what i just answered um on the blog and i i feel like this this webinar itself has asked a lot of questions that each individually should be blog posts so uh we will we will do our best to um be publishing more content in our docs in the blog as ariel said he'll probably have me on his um he does weekly uh um uh tech talk kind of things um and so i guess the best thing for now is to follow me and ariel on twitter and as we produce more content around this we'll be sharing it um you know subscribe to the revenue cat newsletter subscribe to the app figures newsletter um and as we are able to both produce more content on understanding these things and then also um you know provide more solutions i was shocked to learn today uh um and uh i don't know if you'd want me to say publicly but app figures is a lot smaller than i thought it was for for as much as they've tackled it as much as they do uh you know they're a relatively small company uh and bootstrap they've never taken funding um and so i won't say the exact number of employees in case ariel didn't want me to say uh and the revenue cat you know we're 45 people now uh we'll be probably you know close to 100 in the next 12 months um but there's a lot of stuff that we still are in the process of building out to make these things easier and easier and so we will continue uh working that direction so follow me and ariel for for updates on on uh you know better better and better solutions for this but but again you know for cross-platform payments specifically we we do have a lot of great tools with stripe and android amazon app store and apple's app store and then feel free to hit me up too on twitter as well that was almost two hours uh thank you for the people who stuck around all the way to the end um and for asking so many interesting questions and um yeah we'll have to do this again soon bye y'all