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Update on writers' payments
One of the most popular queries raised by our writers over the past few weeks is ‘When are we going to get paid?’ Our writers are of paramount importance to the website so we feel it is important that they understand how our systems operate. We have explained below, in layman’s terms, the journey from a transaction being entered into by a visitor to the site to a writer’s account being credited with funds available for drawdown.
As you will be aware, our main sources of revenue are from marketing and introductory services to third party advertisers and travel-related service providers. Although our commercial agreements with these parties are all different, one common theme running through all of the agreements is that we invoice our revenues on a monthly basis.
This means that at the end of a month we issue invoices for all revenue generated during that month from activity on the website. Our agreed payment terms for those invoices will vary – most providers agree to pay us within 30 days of our invoice, but some take longer. A further complication is that certain providers do not recognise revenue generated from a travel booking until after the customer has travelled. As you can appreciate this prevents subsequent adjustments in respect of cancellations but it also means that we may have to wait longer before collecting revenue that we have earned.
To illustrate this timing issue we have confirmed bookings with one of our commercial partners that were made during July for trips in September. The partner's payment terms mean we will not receive payment in connection with these bookings until the end of November so there is a lead time of almost 5 months between the booking being made and our commission being received.
The final complication is that we cannot earn revenue from our commercial relationships unless our commercial partners appear on the website. We have to undertake a substantial amount of preliminary work in agreeing contractual terms, integrating our website with that of the provider and testing to ensure that we are able to accurately track activity on the site. We have added a large number of providers to the site at various times over the course of the last eight weeks or so and each provider will have a different contract start date.
Of course we undertake to share our revenue with the writers whose guides appear on the site. We pay the revenue share out to writers in the middle of the month. Payments made to writers are based on the cash we have collected up to the end of the previous month.
We launched the site on 18th June as a brand new concept in ‘beta’ form. We have been pleased with the level of visitors coming to site but we are keen to drive this forward in the coming months. However, we need to work hard in building our brand and ensuring our visitors trust us enough to research their trip and book via our site. Naturally this trust takes some time build and our revenues will similarly take time to build as the site develops and matures. Our revenues to date have been entirely in line with our expectations based on what we know about the habits of visitors to travel websites and the fact that we are a start-up business.
We are keen to manage the expectations of our writers so we have taken the decision to issue our first invoices to providers to cover the period from launch to 31st August. Based on the timeline explained earlier this means we should receive some revenue by the end of September with the remainder received by 31st October. Consequently, the earliest date by which we will be in a position to make payments to writers will be 15th October. Thereafter we will have entered into the payment cycle and each month on or around the 15th we will be in a position to credit writers’ accounts with funds albeit that there may be delays caused as a result of our partners' payment terms.
Please don’t be disheartened if your account is credited with a small amount or even does not receive any funds on the first payment run. We are working hard to maximise the opportunities for our writers to make money and we are confident that we are building what will become a mutually beneficial business in the years to come. We are confident that your patience will be rewarded.
Although we are not able to do so at the present time, we intend to improve the automation of the payment process as much as possible with the ultimate goal being that writers can log in to their account on our site and monitor their earnings on a real-time basis. We will continue to update you on any developments in this respect over the coming months and should you wish to share your views on any of the topics discussed we always welcome your feedback.