Good evening. My guest today is Micha\u0142 Kariozen. He is a partner at Mac Auditor and a long-standing lecturer and member of staff at the Department of Management Accounting at the Warsaw School of Economics. Please join us. Katarzyna Nawrocka, \u201eOn loyalty schemes at night\u201d.<\/p>\n
Good evening.<\/p>\n
Good evening.<\/p>\n
Michael, we\u2019re going to be discussing the perspective of a chartered accountant when dealing with a loyalty scheme. But before we do that, I\u2019d like us to explain to our viewers what a chartered accountant does and what the differences are between a chartered accountant, an accountant and a tax adviser.<\/p>\n
Right. Well, a chartered accountant carries out financial audits. It might sound rather serious, and not everyone immediately realises what it involves, but amongst these financial audit procedures, the most recognisable and widespread is the examination of financial statements \u2013 in other words, an audit. The role of a chartered accountant is to carry out an audit of the financial statements, the end result of which is the issuance of an audit report; in this report, we can read whether the financial statements have been prepared fairly and correctly. So the main element of the audit report is the opinion. In short, the chartered accountant expresses an opinion on the financial statements. In other words, the statutory auditor provides the user of the financial statements with a certain level of assurance that the financial statements before them have indeed been prepared fairly, and that these financial statements can be relied upon when making decisions. And that is, that is the main role of the chartered accountant \u2013 the very role of the auditor. Of course, a chartered accountant sometimes provides other services as well, but I don\u2019t think we need to discuss this in detail here, as we would probably have to devote a separate discussion to it. As for the bookkeeper, well, the role of the bookkeeper \u2013 even though it also involves bookkeeping, and the chartered accountant also deals with bookkeeping \u2013 is, nevertheless, entirely different. This is because the role of an accountant is to maintain the accounts; in short, the accounts serve to record, in a systematic manner, the financial effects of the transactions carried out by a given entity. So the bookkeeper is responsible for maintaining the books. And what comes out of these books? Well, these books are later used to produce, amongst other things, financial statements, but this is usually on an annual basis. And it is precisely these financial statements that are subsequently audited by a chartered accountant, yes. However, these accounts also give rise to various other reports, issued at different intervals, particularly on a monthly basis. These reports may include, amongst other things, reports used for tax purposes. Because when we prepare a tax return, we should note that this is also a type of report. So, the accountant is, of course, also responsible for tax settlements, whether on a monthly or annual basis. Because let\u2019s remember that some taxes are annual in nature; for example, CIT \u2013 corporation tax \u2013 is an annual tax. Admittedly, we make advance payments every month, but the final settlement is annual. Whereas VAT is a tax that typically operates on a monthly cycle. So, does the accountant work on a day-to-day basis with the company where they are employed, or \u2013 if they are an external accountant because the company uses outsourcing \u2013 does the chartered accountant, sorry \u2013 the accountant, the accountant carries out these services on a monthly basis, or is it often on a day-to-day basis? Yes. Often it\u2019s simply day-to-day work: collaborating with the client, maintaining constant communication with them, working with accounting documents, and liaising with the tax office. Well, I could go on and on. Within this annual cycle, this includes, amongst other things, drawing up the financial statements and preparing the annual tax returns. So the accountant works very closely with their client or employer. It depends on whether we\u2019re talking about external or internal accounting. A chartered accountant, however, must be independent of the client in accordance with professional standards and legal requirements, yes.<\/p>\n
Let me just check. So a chartered accountant can\u2019t be a permanent employee at our company?<\/p>\n
Absolutely \u2013 they cannot be a permanent employee. They cannot be one of our shareholders. They cannot have any family ties. In other words, the auditor must be impartial and independent. These requirements are very strict. In fact, the Act on Statutory Auditors clearly states that an audit of financial statements carried out in breach of independence is invalid by law. And let\u2019s not forget that for many companies, an audit of financial statements is a statutory obligation. So if we carry out this audit\u2026 and it is conducted in breach of independence \u2013 it will be invalid by law, meaning that the company has failed to fulfil this obligation altogether, which carries serious consequences, including criminal penalties. But that is not all: for example, if the financial statements show a profit, and the shareholders subsequently wish to distribute that profit or pay a dividend, whilst there was an obligation to have the accounts audited, it may turn out that the resolutions on the distribution of profit passed by the shareholders are also invalid, because the audit of the financial statements was found to be invalid by law. Here, too, this independence is particularly, particularly important, which is why statutory auditors are subject to numerous restrictions when it comes to cooperating with their clients in areas other than auditing. In principle, a chartered accountant should focus on the audit, and this day-to-day contact is partly restricted, as the chartered accountant is not expected to participate in day-to-day accounting processes, but rather to verify subsequently whether the accountants\u2019 work is correct.<\/p>\n
We already know what a chartered accountant and an accountant do, and what the differences are between their roles. Now for the final area I asked to have explained: the tax adviser.<\/p>\n
Sure. Well, there are times like this \u2013 times when it\u2019s hard to be an expert in everything. Even if it seems to some that finance and accounting is an area in which an accountant or a chartered accountant ought to be thoroughly knowledgeable, that\u2019s only half the truth. Because so many of these financial and business issues are now so complex. Every year, we see a growing number of different legal regulations, interpretations issued by tax authorities, court rulings, and so on. We have European law, which, for example, is of enormous significance when it comes to VAT. If someone were to claim that they \u2013 be it an accountant or a chartered accountant \u2013 have a thorough understanding of this, that and the other, they would often be misrepresenting the truth. We need these specialists to help us. That is why we need tax advisers. Clients often use the services of an accountant \u2013 for example, an accountancy firm \u2013 but at the same time they use the services of a tax adviser who will identify, identify risks and work with their client and also with the bookkeeper to ensure \u201ecompliance\u201d \u2013 as we often say in English \u2013 that is, compliance with the regulations. Ensuring that all requirements are met. In fact, when we talk about a tax adviser, I think we\u2019re really just talking about one example of a specialist who can help us with these matters in the financial sphere. Because sometimes we may just as well need the help of a lawyer. We may sometimes need the help of an actuary, yes. So let\u2019s note that, in fact, this\u2026 We\u2019re currently dealing with such a high level of complexity that we need these specialists. It\u2019s just like how, in the past, we might have simply gone to see a doctor, but today it\u2019s hard to imagine just saying, \u2018I\u2019m off to see a doctor\u2019. All right, but which one, exactly? Which specialism? It\u2019s the same in business and finance today \u2013 the level of specialisation is very, very high. Although perhaps I\u2019ll just say, to conclude, that accountants and chartered accountants are, in fact, professions where you need to be able to make a great many connections. We don\u2019t necessarily have to be specialists in absolutely everything, down to every last detail, but we do need to make connections \u2013 sometimes even just in broad terms \u2013 with almost everything. Because if I don\u2019t make the connection, perhaps I won\u2019t at all\u2026 I might overlook some important area in my work, and that could lead to major problems. As an accountant or a chartered accountant, I need to be able to make connections well enough and keep up to date with various issues and new developments. But not just new developments. I also need to remember what came before, if only to identify such risks. Perhaps there\u2019s a problem; perhaps we need to seek the help of a specialist. It\u2019s already a great deal that I didn\u2019t overlook it and flagged the problem. What happens next \u2013 whether my client takes my suggestion on board \u2013 well, that\u2019s another matter. But I\u2019ve already flagged it up. This is precisely the modern role of the accountant and the chartered accountant \u2013 an interdisciplinary role, but not the be-all and end-all.<\/p>\n
Now for a few figures and statistics. There are at least 350,000 accountants in Poland, 40,000 accountancy firms in operation, and around 70,000 accountants hold a certificate authorising them to provide bookkeeping services. At the same time, around 3,000 people work as chartered auditors. And now, looking at loyalty programmes \u2013 of which there are 120 in Poland, some aimed at end consumers and others at business-to-business clients \u2013 we have 100 such programmes. This seems like a very niche venture when it comes to collaboration between a chartered accountant and a loyalty programme organiser.<\/p>\n
Hmm. Well, I can see you\u2019ve put in a fair bit of work gathering all that data. If we were to say that this is a niche area, then on the one hand we could compare the figures for how many accountants we have, and how many loyalty schemes there are \u2013 this might indeed lead to the conclusion that only a few accountants, chartered accountants or tax advisers have actually come across this sort of thing. That\u2019s true. But on the other hand, let\u2019s remember that in business, across many sectors, there are currently a whole host of such niche topics that we could identify, yes. A whole host of services are emerging which, until very recently, didn\u2019t exist \u2013 they\u2019re something new. I don\u2019t know, until recently there weren\u2019t \u2013 apps weren\u2019t springing up like mushrooms after rain \u2013 the sort that each of us has somewhere on our phones and uses. Right now, a whole host of such apps are being developed. So how is an accountant or a chartered accountant supposed to cope with all this whilst constantly encountering new developments? Well, actually, this brings us back to what we were saying a moment ago. An accountant or a chartered accountant isn\u2019t necessarily meant to be the be-all and end-all. An accountant or chartered accountant must operate within certain parameters. So, above all, what\u2019s important is understanding \u2013 understanding, or perhaps preparing oneself to understand the business. So, I come across a business, perhaps one that\u2019s completely new to me. The business operates according to a certain model; there are contracts in place, or ready to be concluded \u2013 for example, contracts relating to loyalty schemes. And now this specialist \u2013 be it an accountant or a chartered accountant \u2013 wonders whether they will be able to cope with this new business, this new model, this new type of contract, which will subsequently have implications for accounting, tax and reporting purposes. If this auditor or accountant has that basic, yet solid, foundation. Basic, solid \u2013 well, adequately good \u2013 preparation for dealing with the analysis of contracts, not necessarily on their own, but often with the help of specialists. Perhaps I\u2019ll come back to that in a moment. But if such a person is able to take the necessary steps to understand the business and grasp the underlying model, they will also be able to handle a seemingly niche issue such as a loyalty scheme, because what impact will such a loyalty scheme have? Well, as is usually the case in accounting \u2013 it will translate into some revenue and some costs. Various types of assets and liabilities will likely arise along the way. So we\u2019re operating within a certain framework governed by established principles. This framework, which tells us exactly how to treat revenue, costs, assets and liabilities, simply needs to be applied appropriately here. I also believe that, of course, an accountant or a chartered accountant should know their limits and realise that there are certain tasks they cannot undertake. For example, if I were, I don\u2019t know, to be asked to audit the financial statements of a large insurance company, and I do not specialise in insurance, I would probably refuse to carry out such a service as an auditor. But it should not be the case either that accountants or chartered auditors are paralysed at the mere mention of any new business concept \u2013 be it new or niche \u2013 because, whilst loyalty schemes may not be all that new, the fact that there aren\u2019t that many of them doesn\u2019t mean they\u2019re all that widespread. In fact, very few people have come across them from a financial or accounting perspective. But should that paralyse me, or should I be afraid of it? Probably not, because\u2026<\/p>\n
This leads me to conclude that everything new seems difficult at first, but only at first.<\/p>\n
Oh, oh, of course it is. Well, if we were to shy away from new developments, I suppose we\u2019d be in for some very tough times, because right now we\u2019re living in a world of new developments. Practically every day brings something new. But let\u2019s note that accountants are grappling with these new developments all the time. For those who want to succeed in this industry, coming to terms with these new developments is absolutely essential. And I suppose everyone has now got used to starting their day by glancing at various websites, just to see whether there are 3 or 30 new developments today.<\/p>\n
That\u2019s true. Assuming that two accountants are working on a single loyalty scheme, that gives us just under 0.10% of accountants. And I would very much like us to discuss in this episode the challenges faced by an accountant who manages such a loyalty programme. Perhaps a better way of putting it would be \u2018works with the organiser of the loyalty programme\u2019. So that we can outline the main principles.<\/p>\n
Sure. Well, here, here the challenge is indeed considerable. And I think it\u2019s primarily a communication challenge. I mean, the accountant must first of all know what to ask about and, and expect this very assertively. Because let\u2019s remember that sometimes, from the accountant\u2019s point of view, the organiser of such a loyalty scheme is either the employer or the client. From the organiser\u2019s point of view, it might be a bit surprising that the accountant is asking me for this, and that, and the other. For example, various documents relating to the programme. But why is the accountant asking for this? The accountant has to deal with what I\u2019ve already touched on briefly earlier, namely when and in what amount to recognise revenue, costs, assets and liabilities. I could perhaps list a few more here, but I think I\u2019ll stick to these main categories. So, a loyalty programme from the perspective of its organiser \u2013 who, as I understand it, runs this programme for the benefit of their client or clients \u2013 what will this loyalty programme generate? Well, the intention is to make a profit, yes. That\u2019s why we\u2019re the organiser of the loyalty programme \u2013 to make a profit from running it. Of course. Right, so now let\u2019s look at it from an accountant\u2019s perspective \u2013 where do the profits come from? Profits are the difference between revenue generated and costs incurred. Simple. Right, but now we\u2019re getting into the finer details, namely when that revenue is recognised. Well, in accounting, it\u2019s a bit like this: when we\u2019re allowed to recognise revenue is often \u2013 I wouldn\u2019t say so much a matter of debate \u2013 but rather a matter that requires careful attention. It\u2019s easier for us to determine when revenue is generated \u2013 say, from the sale of yoghurt in a shop: a customer came in, bought the yoghurt \u2013 that\u2019s the moment when the sale took place, and someone generated revenue. All right. But when we provide services \u2013 when we provide services \u2013 it\u2019s a process that extends over time, and it\u2019s often not a process that will necessarily generate that revenue on a linear basis. For example, as an organiser, we might receive a fee for running the programme as a whole \u2013 and this might indeed be a fee that is spread out more or less linearly, or should be; in the accounts, the effect will be linear when we\u2019re talking about revenue. But there may also be other elements that will cause this revenue to arise. This could be a success fee, or it could be other events arising from the structure of our programme, which will determine the timing of revenue recognition. So now we have revenue, but what about costs? In accounting, there is a key principle \u2013 the matching principle. In other words, if we recognise revenue in the accounts \u2013 and consequently in the financial statements \u2013 then costs commensurate with that revenue should appear in the same period, as we say. That is, costs that relate to that revenue either directly or indirectly. Maintaining the matching principle is absolutely, absolutely crucial. And that is why we must design our accounting system in such a way that it enables us to maintain this matching principle. Now, what does it mean to design an accounting system? Well, we design the chart of accounts that we use. We design business reports and auxiliary files that help us carry out various calculations. But let\u2019s also remember that before all that, what comes first? There are transactions, followed by accounting documents. And now, such an accounting document \u2013 for example, an invoice \u2013 must be correctly interpreted by the accountant. How is the accountant supposed to do this? They must obtain information from management, that is, from the people who understand why a particular cost was incurred. This is so that they can answer the question of whether this cost is an immediate expense relating to revenue \u2013 and therefore one that will appear in my profit and loss account straight away \u2013 or whether it is a cost incurred to generate revenue only in the future. Well, if I am only due to generate a certain amount of revenue in the future, but have already incurred the cost, then that cost must, so to speak, wait its turn in a sort of \u2018waiting room\u2019. In other words, it temporarily constitutes one of my assets. Of course, assets may also lose value in the meantime, but that is probably a topic for a separate discussion. So here I have given \u2013 perhaps a very brief example \u2013 which, of course, does not cover everything. So we have this revenue, which should appear at the appropriate time. We have costs that should be proportionate. Certain assets may arise in the meantime. And what\u2019s also very important here is that, of course, liabilities also arise. The nature of such a programme may be such that, as the organiser, I am obliged to incur certain costs. But\u2014and here I\u2019d like to move smoothly from the organiser\u2019s perspective to the customer\u2019s. Well, because in reality, when we organise a loyalty scheme, our customer \u2013 very often when they decide to join the scheme \u2013 is, so to speak, taking on certain obligations. Obligations towards whom? Towards consumers, for example. So a customer who buys a can of drink for 2 z\u0142 has the right to buy the next can for half price. This means that an obligation has arisen to provide that end customer, the consumer, with that next can of drink at the reduced price. So, in reality, we\u2019re talking here about obligations that arise, which sometimes need to be estimated. And when we have a liability that we need to estimate, we often call it a provision, yes. So we estimate these liabilities of ours, which of course means that, as a result, we also estimate the costs. Because every event in accounting \u2013 practically every one \u2013 has two effects at the same time. When we talk about incurring costs, these are usually accompanied by the creation of liabilities, which we must later settle \u2013 sometimes by paying them off, sometimes by settling them in another way. So, in fact, if I were to summarise what I\u2019ve said, I\u2019d say that the role of an accountant is to have a thorough understanding of the details of a given programme. As I said earlier, not necessarily on their own. Rather, with the help of managers and lawyers, who have presumably drawn up the terms and conditions, and so on. To understand the programme thoroughly, to grasp its essence, to organise communication with the client effectively, to manage the document flow, and to describe these documents in a way that facilitates their subsequent interpretation and recording in the accounts. Why? Precisely to achieve the end result, which is the correct recognition of revenue and costs, but also, in certain situations, assets and \u2013 very often, very often \u2013 liabilities.<\/p>\n
Michael, we\u2019re staying on the topic of challenges because I\u2019d very much like us to discuss right now the specific challenges faced by an accountant who works with, or for, a company that runs loyalty schemes \u2013 and there are three types of these. Namely, we have points-based, discount and cashback schemes. And, of course, there are also hybrid versions on the market. We also have the option of using multi-partner schemes, which is why there are differences. Let\u2019s talk about these differences.<\/p>\n
Here we\u2019re returning to a point we\u2019ve already touched on briefly. Every programme of this sort is, in a way, tailor-made. We can certainly group them into these categories, but I think it\u2019ll be easiest if we use some examples to illustrate the point.<\/p>\n
Let\u2019s break down your answer by specific type of loyalty scheme. Let\u2019s start with discount schemes.<\/p>\n
As for discounts, well, brilliant. So let\u2019s go back to that example we just gave a moment ago. We have a discount scheme whereby, for example, Mr Kowalski buys this can of drink \u2013 let\u2019s just say straight out that he buys it for, say, 5 z\u0142. But he\u2019s entitled to buy another can of drink for 1 z\u0142. Right, so in that case, the accountant asks himself how much revenue was generated from the sale of that first can of soft drink. I sold a can of soft drink for 5 z\u0142, so I have revenue of 5 z\u0142. All right, but the accountant always considers the economic substance of a given transaction. After all, Mr Kowalski is highly motivated to buy the next can for just 1 z\u0142, given that the standard price is 5. What does this mean? That Mr Kowalski will almost certainly take up this option. So perhaps he\u2019ll come back to the shop the next day, where his right to purchase that next can is somehow documented. I don\u2019t know if there\u2019s some sort of record, a QR code, or something else in the app where he says: \u201eI\u2019d like another can; here\u2019s my proof of eligibility to buy this next can for 1 z\u0142.\u201d What does this mean? It means that, in reality, what are we selling? Two cans in total for 6 z\u0142. So, what was the actual revenue from the sale of that first can? 3 z\u0142. And from the second can as well\u2014also 3 z\u0142. Now then, is this mechanism I\u2019ve described in such a very simple example\u2014perhaps loyalty scheme specialists might correct me here and say, \u201eNo, that\u2019s not quite right\u201d\u2014 but I\u2019ve given a simple example so that we can visualise it in the simplest possible way. Will we find such an example, I don\u2019t know, in the regulations? Will we find it in the Accounting Act, which states: in this type of situation, one should proceed in such and such a way. Well, not quite, because accounting regulations are of a framework nature. If we look at the Accounting Act, it really is very concise. Do we have any guidance? Yes, we have the International Financial Reporting Standards. We do, but as regards companies \u2013 other than those listed on the stock exchange, banks or certain other entities \u2013 most Polish entities are not obliged to apply international standards. But sometimes it is worth it; they do come to our aid. We have International Financial Reporting Standard 15, which primarily concerns revenue, but also indirectly relates to costs, even though this is not explicitly stated in the standard\u2019s title. And this standard guides us on how to proceed. So, by drawing on such an international standard, what can we do? We can set out appropriate, detailed regulations to be adopted in our accounting policy. Let me remind you here \u2013 every company should have a written accounting policy, that is, a document setting out the various principles governing the recording and presentation of financial data in the financial statements. And this accounting policy is precisely where we can go into detail and translate our typical business scenarios into accounting practice. What can an accountant do here? An accountant can advise the company\u2019s management on how the accounting policy should be amended or reformulated to incorporate, for example, the mechanism I\u2019ve described, so as to prevent a situation arising where, for example, I recognise the revenue from the sale of that first can in our simple example at 5 z\u0142 each, and then I draw up the financial statements, the auditor comes along \u2013 that\u2019s where we started \u2013 and says, \u201cOh no, no, no. \u2018The timing of revenue recognition here is completely wrong. In fact, for now you should only recognise 3 z\u0142\u2019,\u201d yes. Of course, I\u2019ve used very small amounts here, but let\u2019s imagine programmes where the sums involved aren\u2019t 3 z\u0142 or 5 z\u0142 \u2013 let\u2019s just imagine programmes where we\u2019re talking about hundreds of millions, right. And certain events take place, perhaps at the turn of the year. Well, here the consequences could be, could be very, very far-reaching. That\u2019s why, to cut a long story short, I\u2019d first and foremost emphasise an element such as what I might call the timing of revenue recognition and also the valuation of that revenue. Let\u2019s remember \u2013 this valuation, this valuation of that revenue, won\u2019t necessarily be the amount that appears on a fiscal receipt or on an invoice in a B2B transaction. We can, of course, make entries on an ongoing basis based on these receipts and invoices. But when it comes to the year-end, or even a shorter reporting period \u2013 a month or a half-year. Perhaps we have a company listed on the stock exchange \u2013 it must, it must publish quarterly, half-yearly and annual reports \u2013 then for every such date that is significant from a reporting perspective, particularly external reporting but, I think, also internal business reporting, we must be able to accurately capture revenue on each such date. And, of course, the corresponding costs, so that our financial results reflect the actual economic substance, rather than seemingly random figures that fail to capture precisely those pitfalls and details arising from a given programme.<\/p>\n
We already know how discount loyalty schemes work. So let\u2019s move on seamlessly to the points-based ones.<\/p>\n
Yes. Well, of course, these loyalty schemes can vary greatly, because if the end customer collects points, they can use them to get some sort of reward \u2013 I don\u2019t know, free goods or services. But they can probably also get discounts sometimes, yes. It could be a mix of both. So a loyalty scheme can probably be a bit of a discount scheme at the same time, or perhaps not at all. Here, here, too, the situations are likely to be very diverse, but perhaps let\u2019s focus for a moment on the kind of programme that\u2019s easiest to imagine: I collect some points, and at some point I can use them up, spend them, yes. So I\u2019ve accumulated a certain number of points, for example by buying petrol, and now I\u2019m entitled to receive a Resorak toy car, which I\u2019ll happily give to my child, whilst also using my points to make my next petrol purchase. It turns out I\u2019ve got enough of these points. I\u2019ll ask for a toy car and I\u2019ll happily receive it for free, or perhaps for 1 grosz, because the tax authorities have decided it shouldn\u2019t be free. It should be for 1 grosz, but in practice I receive this Resorak \u2013 or perhaps something else, or perhaps something of greater value \u2013 free of charge in exchange for my points. So now, what does this mean? From an accountant\u2019s point of view, it means that there is often a certain time lag; we\u2019ve talked a lot about this principle of matching, where revenue and costs must be matched. I might add here that \u2013 to explain a bit more what this matching principle is all about \u2013 it means that not only must the costs relating to a given revenue appear in the same period, but they must also appear in full. So, if I\u2019ve sold my customer fuel totalling 1,000 z\u0142, because he\u2019s just accumulated a certain number of points, having purchased fuel totalling 1,000 z\u0142. This means that my financial statements should also include the full costs corresponding to that revenue of 1,000 z\u0142. What will be the main cost? Well, obviously, the purchase price of the fuel I sold. But these costs will also include indirect costs, such as the costs of running the petrol station \u2013 but what else will there be? There should also be the cost of the reward that my customer will receive in exchange for their points. The problem is simply that the prize is often not handed out until some time in the future. So here we have a cost whose incurrence may be deferred over time. So what needs to be done now? A liability must be recognised, often on an estimated basis. We\u2019ll call this liability a provision. As I\u2019ve already mentioned, we refer to an estimated liability as a provision. Why do we need to estimate it? Well, of course, it\u2019s also the case that whilst customers earn these points, not all of them will necessarily redeem them. So there\u2019s an element of probability involved here. Let\u2019s take this opportunity to note that, in modern accounting in general, we encounter a great many \u2013 really, a great many \u2013 situations where we use estimates. Sometimes we need specialists to help us with these estimates \u2013 for example, specialists in probability. It may be the case that, with a loyalty scheme like this, in order to estimate the costs accurately, we need to build a certain model. Especially if it\u2019s a large-scale loyalty programme \u2013 we need to build a model that shows, for example, consumer behaviour in terms of how they use up or \u201eburn\u201d these points, in order to accurately estimate the probability of incurring costs of a specific amount. And here, we may sometimes need, I don\u2019t know, an actuary or some other expert who knows how to construct such models. So, to summarise again, in such a situation the accountant should get in touch with the client and say: \u201cListen, I need your cooperation \u2013 or that of your specialists \u2013 so that we can accurately and comprehensively estimate the costs, which will in turn result in the recognition of appropriate provisions\u201d, and later on we\u2019ll utilise these provisions as and when these points are redeemed \u2013 that is, for example, when the rewards are issued. So here we\u2019re dealing, first and foremost, with the issue of costs and the associated provisions. Although, as I said earlier, if this points scheme is also a discount scheme, then we return to the issue we discussed previously \u2013 namely, the amount of revenue generated at each stage. Well, because that promised discount may be a sign that the revenue shown on the receipt or invoice is perhaps overstated, because somewhere in there is that promised discount, and the average selling price I\u2019d expect is actually lower \u2013 which is precisely the result of this discount scheme; indeed, the granting of discounts may well be structured precisely through this redemption of points. So I imagine these hybrid variants aren\u2019t all that rare here either.<\/p>\n
And that leaves us with the third type of loyalty scheme \u2013 cashback.<\/p>\n
On the one hand, we might have a very simple situation: for example, if I use a payment card and make a purchase for 100 z\u0142, and the loyalty scheme is run by a bank \u2013 which wants to promote card payments. I\u2019ve made a purchase for 100 z\u0142 as the cardholder, and then, say, 50 groszy is credited back to my bank account. From the organiser\u2019s point of view, what is this? It\u2019s simply a cost. However, well, you know \u2013 you also mentioned multi-partner programmes earlier; we\u2019re all familiar with such schemes. And here, if I can earn points or receive cashback, perhaps through some sort of cross-partner scheme where multiple partners are involved at the same time, well, then perhaps, it may well be the case that a dedicated team is needed. So if we\u2019re getting into such more complex structures, then surely we\u2019re talking here about setting up a small team or a sort of dedicated unit, which will first design a suitable IT system to help us account for this, ensuring that the revenue and costs for individual programme partners are recorded in the correct amounts. And often these are even international programmes, so the level of complexity is high, and there are surely specialists who are capable of designing such systems at this IT level as well.<\/p>\n
Michael, I\u2019d like to thank you very much for speaking with me today, but we haven\u2019t covered everything yet, so I\u2019d like to assure our viewers that we\u2019ll be back to finish our conversation and clarify some other very important details.<\/p>\n
Well, I\u2019ve certainly gone on a bit, so I\u2019ve got no choice but to accept your offer.<\/p>\n
I\u2019m really pleased. In that case, I\u2019d like to invite you to the second part of the episode, in which my guest will be Micha\u0142 Kariozen.<\/p>\n
See you later.<\/p>\n
See you later.<\/p>","protected":false},"excerpt":{"rendered":"
Good evening. My guest today is Micha\u0142 Kariozen. He is a partner at Mac Auditor and a long-standing lecturer and member of staff at the Department of Management Accounting at the Warsaw School of Economics. Please join us. Katarzyna Nawrocka: \u201eOn loyalty programmes by night\u201d. Good evening. Good evening. Micha\u0142, we\u2019re going to be discussing the perspective of a chartered accountant when dealing with a loyalty programme. But before we do, I\u2019d like us to explain to our viewers what\u2026<\/p>","protected":false},"author":2,"featured_media":3033,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[67],"tags":[],"class_list":["post-3032","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-o-programach-lojalnosciowych-noca"],"taxonomy_info":{"category":[{"value":67,"label":"O programach lojalno\u015bciowych noc\u0105"}]},"featured_image_src_large":["https:\/\/i360.com.pl\/wp-content\/uploads\/2021\/10\/30-biegly-rewident-plansza-2-1024x576.jpg",1024,576,true],"author_info":{"display_name":"Tomasz Makaruk","author_link":"https:\/\/i360.com.pl\/en\/author\/autor\/"},"comment_info":0,"category_info":[{"term_id":67,"name":"O programach lojalno\u015bciowych noc\u0105","slug":"o-programach-lojalnosciowych-noca","term_group":0,"term_taxonomy_id":67,"taxonomy":"category","description":"","parent":0,"count":26,"filter":"raw","term_order":"0","cat_ID":67,"category_count":26,"category_description":"","cat_name":"O programach lojalno\u015bciowych noc\u0105","category_nicename":"o-programach-lojalnosciowych-noca","category_parent":0}],"tag_info":false,"_links":{"self":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts\/3032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/comments?post=3032"}],"version-history":[{"count":0,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/posts\/3032\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/media\/3033"}],"wp:attachment":[{"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/media?parent=3032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/categories?post=3032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/i360.com.pl\/en\/wp-json\/wp\/v2\/tags?post=3032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}