Accounting Challenges Presented by Virtual Currencies
Wednesday, February 4th, 2009Say someone gets ahold of your credit card information. Then that person goes and opens up a Click and Buy account and funds that account with your credit card. In addition, he funds it with other people’s credit cards as well. Then he goes and spends that cash at 14 different online retailers. Then, 3 weeks later, after you notice a those fraudulent charges, you initiate chargebacks for each one. At around the same time a few other people whose credit cards were used to fund that Click and Buy account also initiate chargebacks. However, not every charge the fraudster made gets noticed and charged back. Some of the cash remains uncontested.
How does Click and Buy decide which stores to subsequently pass those chargebacks on to? Never mind that Click and Buy would likely see the pattern and simply reverse all charges from the obviously fraudulent account.
As it turns out, our friend the First In First Out accounting method comes to the fore. You have to do some scripting on top of very solid transaction logging tables, but it traces everything back as best as one possibly can. It’s still entails an assumption that cash is spent in the order in which it was deposited, so one can point it out it’s not perfect.
As a side note, if you’re developing a system like the above, do yourself a favor and maintain lookup tables for every column in every table… well, of course, only for those columns that don’t have, like, potentially unique values for each row. You can then simply point SQL Server Analysis Services (SSAS) right at those tables, and voila, you can make your reporting life easy as pie.. theoretically of course ![]()