A shockingly common issue for competition businesses that we don’t often talk about is double-counting your revenue. The most common cause? Your payment system. First, let’s explain what this is and why you need to be aware of it.
The Issue:
Chances are you’ve double-counted your revenue. It’s quite self-explanatory: ‘double counting’ your revenue means you’ve counted the same revenue twice. It’s your actual revenue + ‘phantom’ revenue (that is, revenue that isn’t really there). It misrepresents your turnover and, in turn, also your overall business performance.
It’s not exactly a rare case; it actually happens all the time. So, there’s no need to beat yourself up over it. However, it’s good to be aware of its impacts on your competition business — this can help you prevent it from slipping under your radar.
Let’s go over some of the impacts of double-counting your revenue, then.
1. Misleading Financial Health
Double-counted revenue, naturally, leads to an inaccurate understanding of your financial health. It makes your business seem more successful than it really is (though we’re sure it’s plenty successful, regardless).
To gain a more accurate understanding, review your Profit and Loss Report and look for any unusually high income figures. Also scan your sales transactions, and compare your bank statements to your accounting software (or an accountant, if you have one). See what’s up, and, if you spot any mistakes in your revenue, fix ‘em.
2. Increased Taxes
If your revenue is suspiciously high, your tax bill will be too.
What happens is: when your revenue is double counted, you’re essentially informing tax authorities (like HMRC) that you’ve earned more than you really did. Since your income and corporate taxes are based on your profit, inflating your revenue creates a falsely high profit figure, which leads to a higher tax bill. Booo!
In this case, what you want to do is check — and then double and triple check — your revenue and other financial docs (refer to point #1 for advice on how to do that). You want to be 100% certain that your revenue is correct before taxes come into play.
On that note, if your financial docs are consistently inaccurate, this can lead to serious complications during audits, tax disputes, and even potential regulatory scrutiny. No business wears compliance and legal issues well, so best to avoid those by keeping everything in check, staying organised, and keeping track of your finances.
3. Misinformed Decision Making
Another thing that’s impacted by double-counting your revenue is your resources — more specifically, where you allocate them.
When your revenue is (or, rather, appears) to be so high, you’ll want to invest it in your business. You might choose to put some of those £££ into growth initiatives, costly marketing campaigns, or bigger and better prizes. All of which is completely fair, but the issue lies herein: the £££ you invested into all this doesn’t exist. This creates cash flow problems, which can have a negative domino effect on other parts of your business.
Best to be avoided, if you ask us!
4. Wasted Time
Not only does double-counted revenue impact your metrics and other aspects of your business, but it also wastes your time (and effort, and money!). Here’s how:
- Time will be wasted because you’ll be dedicating days, if not weeks, on an administrative cleanup — a.k.a. fixing the error. This is precious time that could’ve been spent far more efficiently!
- In the same respect, your effort will be dedicated to fixing errors rather than pushing your business forward
- Money could be wasted because it might lead to poor financial decisions, straining your cash flow. As we covered, if the double-counted revenue isn’t noticed in time, you’ll also have to pay higher taxes
Not worth all the hassle, eh? Checking if your revenue deets are correct takes less time.
The Solution: Zap Pay
You’ll be happy to know that we have a lovely lil solution for you to avoid double-counting revenue. With Zap Pay, you don’t have to worry about that one bit.
Zap Pay includes Zap Cashier, a digital wallet where your players get their site credit and cash paid into. It has super reliable analytics. We use coupons instead of credits, so your players’ transactions aren’t mistakenly added to the Revenue Report. Instead, your Revenue Report will reflect your actual revenue — as it should!
Doubling Up the Success
Well, don’t stop at ‘double’ — by all means, triple or quadruple your success! With Zap, the success is unlimited. With our help, you can afford to shoot for the stars.
Are you ready? Contact us today.
