Reconciliation

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Reconciliation matches payments made to all parties involved in application sales on a marketplace (the marketplace, Developers and AppDirect) to the related payment records. Through the reconciliation process, Marketplace Managers can also record payouts made to Developers when the payout responsibility is theirs.

Revenue shares are defined at the application level and are fixed according to percentages outlined in the contract terms agreed to by all parties, although they can be modified if the parties agree to new terms. Revenue shares are configured on your behalf in the billing platform by your AppDirect billing operations representative.

The reconciliation page (at Manage > Marketplace > Dashboard > Billing | Reconciliation) gives the Marketplace Manager a consolidated view of reconciliation payouts and revenue shares. See Reconcile payouts.

Scenarios that require reconciliation

The following scenarios require reconciliation of marketplace revenues between contracted parties:

• Marketplace selling a Developer’s product—When a Developer sells a product on a marketplace, the revenues are shared between the marketplace, the Developer and AppDirect based on previously agreed-to percentages.
• Discounts—Marketplaces can create discounts to lower the price on their marketplace products. By default, when a marketplace applies a discount to a product, 100 per cent of the impact on revenues is applied only to the marketplace’s share of revenues and does not affect the Developer’s share.

The following table shows an example of how reconciliation works, with only the base product price applied (no discount).

Line Description	Total	Developer share	Marketplace share	AppDirect share
Revenue share allocation per party	100%	70%	20%	10%
Base Price of App	$100	$70	$20	$10

The following table shows the same reconciliation scenario, with a $5 discount applied by the marketplace:

Line Description	Total revenues from sales	Developer share	Marketpace share	AppDirect share
Revenue share allocation per party	100%	70%	20%	10%
Price of application	$100	$70	$20	$10
Discount (marketplace)			$5
Revenues per party after discount		$70	$15	$10

In the preceding table, note how the percentage revenue shares does not change, because the reduction to the marketplace’s revenues occurs after the revenue sharing process is completed.

How reconciliation payouts are made

The manner in which payouts are made depends on whether the payout owner is the marketplace or AppDirect. The payout owner is displayed in the last column of the Reconciliation table on the Reconciliation page. See Reconcile payouts for more information.

Marketplace payout ownership—When a marketplace sells a non-network product, payout ownership is assigned to the marketplace and payouts are made as follows:

• The marketplace pays a Developer its share of revenues. The payout is made off-platform but can be recorded on-platform for tracking purposes after payment to the Developer is completed. This is done in the user interface on the Reconciliation page (see Reconcile payouts for a description of this procedure).
• AppDirect issues an invoice to the marketplace for the AppDirect portion of the revenues and payment to AppDirect is done off platform— typically using ACH or wire, based on the terms of your marketplace’s agreement with AppDirect.
• The marketplace retains the remaining revenues as its share.

AppDirect payout ownership—When a marketplace is selling a product from AppDirect’s Network Catalog, payout ownership is assigned to AppDirect. In the Reconciliation table on the Reconciliation page, AppDirect is shown as the payout owner in the last column. Payouts are done as follows:

• The marketplace collects all revenues and, upon receipt of an invoice from AppDirect pays AppDirect for both the AppDirectand Developer shares.
• AppDirect pays the Developer its share of revenues.
• AppDirect retains its share of revenues.