The Main Issue with with YouTube Reporting
YouTube’s reporting is slow. Businesses relying on YouTube data for invoicing and revenue sharing often face a six-week waiting period before receiving conclusive reports. In certain cases, accountants postpone the process of “closing the books” until these final YouTube reports are available. This practice results in various subsequent issues for business operators, hindering their ability to gain a precise and actionable insight into the company’s performance.
Luckily, there exists a more effective approach, and it aligns with GAAP compliance for those who adhere to such standards.
What is an Accounting Estimate?
An accounting estimate refers to an educated guess or approximation of a business transaction’s value when there is no exact method of measurement available. In the context of accrual accounting; estimates play a crucial role in enhancing the comprehensiveness of financial statements.
Usually to anticipate events that have not yet occurred, but which are considered to be probable. These estimates may be subsequently revised as more information becomes available. Changes in accounting estimates impact the current period and future periods, but have no impact on prior periods.
The amount of an accounting estimate is based on historical evidence and the judgment of the accountant. The basis upon which an accounting estimate is made should be fully documented, in case it is audited at a later date.”
Raw Youtube Data is Available Before Its Officially Reported
In order to address this issue, Weekly Accounting has developed a tool designed to daily extract data from YouTube. Subsequently, we transfer this data into the Weekly Data Warehouse, where it undergoes cleaning and transformation processes. Finally, we present it in a format that reasonably aligns with the Official YouTube Report, which typically becomes available six weeks later.
When the contract doesn’t allow you to invoice off of estimates
If a contract you have doesn’t allow you to invoice off of estimates then how can you both wait six weeks to invoice AND close the books?
The answer is through the miracle of the balance sheet and the T accounts, from the estimate, in this case $1,000, book revenue to an “Unbilled Revenue asset account”.
Then when the actual data comes in six weeks later, invoice from the Official Youtube Report, in this case $1,003
That will leave you with a $3 credit balance in unbilled revenue which you can clear to offset revenue or to a bad debt expense.
This entry accounts for the $3 difference between the estimated and actual revenue. Alternatively, you can allocate it to another income or adjustment account depending on how you want to look at it. We generally avoid bad debt accounts in G&A and prefer to lower revenue, because that helps make the financials more accurately reflect the operations of the business.
Analysis over time will reveal patterns in the differences between the real time report and the Official Report that she could take into account when closing the books with the estimated revenue.
Setting up Quickbooks to Invoice to the Balance Sheet
Settings – product and services
Select a product or service – then change the Income Account to hit a (new) balance sheet account instead of to the revenue accounts.
With the Weekly Accounting Real Time Youtube report you can estimate revenue, close the books in a timely fashion AND invoice your customers accurately.