That's Enron accounting using in game purchases.
The actual amount you made for a month could be zero if everyone asked for a refund. And you may not know that until three months later.
Because you do not get the money until 3 months later.
You're describing accrual basis accounting vs cash basis. Accrual basis is the standard that every large company uses. Plenty of companies ship products and then send invoices to their customers that have to be paid in 90 days. This is no different. At time of sale they record the sale and the accounts receivable. Then true up with a writeoff when they receive the cash. Every company has to do something similar for invoices that go unpaid or products that are returned for full price and can then no longer be resold at full price.
You're describing accrual basis accounting vs cash basis. Accrual basis is the standard that every large company uses. Plenty of companies ship products and then send invoices to their customers that have to be paid in 90 days. This is no different. At time of sale they record the sale and the accounts receivable. Then true up with a writeoff when they receive the cash. Every company has to do something similar for invoices that go unpaid or products that are returned for full price and can then no longer be resold at full price.
There are also a couple large banks who will provide loans on the receivables. Not sure how prevalent it is with developers and apple or google, but in almost all other industries investment grade companies that mandate 60-90 day terms with their suppliers will also partner with a bank so that those suppliers can get can right cash away for their sales.
For smaller less credit worthy suppliers it is almost always worthwhile since these loans are based off the credit of the larger investment grade customer and cheaper than any other funding they can get.
Comments
You're describing accrual basis accounting vs cash basis. Accrual basis is the standard that every large company uses. Plenty of companies ship products and then send invoices to their customers that have to be paid in 90 days. This is no different. At time of sale they record the sale and the accounts receivable. Then true up with a writeoff when they receive the cash. Every company has to do something similar for invoices that go unpaid or products that are returned for full price and can then no longer be resold at full price.
There are also a couple large banks who will provide loans on the receivables. Not sure how prevalent it is with developers and apple or google, but in almost all other industries investment grade companies that mandate 60-90 day terms with their suppliers will also partner with a bank so that those suppliers can get can right cash away for their sales.
For smaller less credit worthy suppliers it is almost always worthwhile since these loans are based off the credit of the larger investment grade customer and cheaper than any other funding they can get.