Sales & payments
in your app
Martin Kleppmann
http://go-test.it
http://yes-no-cancel.co.uk
http://twitter.com/martinkl

Automated Cross-Browser Functional Testing
“Selenium in the cloud”

http://go-test.it

SaaS

Revenue model

You should be
making one of
these

We need
more
of
these

We need
more
of
these
£

Your £1m business
e.g. £42/mon × 12 mon ×
2,000 customers

Your £1m business
e.g. £42/mon × 12 mon ×
2,000 customers
Automation!

B2B

Ruby Invoicing
Framework
So… youʼve spent many nights developing your awesome application. Itʼs coming together
nicely, and youʼve showed it to your friends, who got very excited about it too. In fact,
people love your app so much that they are willing to pay you money to use it. Great news!
Keeping it simple, you start taking payments trough PayPal or even accept cheques
through the post. Later you maybe integrate with the API of a more flexible credit card
handling provider. Money is coming in – even better news!
The problems become apparent when you try to turn your app into a business. Suddenly
everything becomes a lot more complicated. You need to start thinking about ugly things
like tax and you need to pay an accountant to sort out the paperwork for you. You need to
start bookkeeping, a prospect which gives you the shivers. Maybe some of your customers
are awkward, accepting billing only in their own currency or requiring a special tax status.
Itʼs all a bit of a mess, and as you grudgingly start ploughing through the Wikipedia page on
“credits and debits”, you wish that you could just get the money and leave it at that.
The missing link between your app and the money
Enter the Ruby Invoicing Framework RubyGem, or invoicing gem for short. Itʼs a collection

Ruby Invoicing
Framework ic in g/
/invo
m
So… youʼve spent many nights developing your awesome application. Itʼs coming together
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u b.
people love your app so much that they are willing to pay you money to use it. Great news!
t.gith
Keeping it simple, you start taking payments trough PayPal or even accept cheques
p
through the post. Later you maybe integrate with the API of a more flexible credit card
//e
handling provider. Money is coming in – even better news!
tt p:
The problems become apparent when you try to turn your app into a business. Suddenly
h
everything becomes a lot more complicated. You need to start thinking about ugly things
like tax and you need to pay an accountant to sort out the paperwork for you. You need to
start bookkeeping, a prospect which gives you the shivers. Maybe some of your customers
are awkward, accepting billing only in their own currency or requiring a special tax status.
Itʼs all a bit of a mess, and as you grudgingly start ploughing through the Wikipedia page on
“credits and debits”, you wish that you could just get the money and leave it at that.
The missing link between your app and the money
Enter the Ruby Invoicing Framework RubyGem, or invoicing gem for short. Itʼs a collection

Richard Messenger, http://www.flickr.com/photos/richardmessenger/2626927255/

Production use

A solid foundation for
building commercial
web apps

I’m not an
accountant

Jargon

Jargon
(as far as we can avoid it)

Installing
$ gem install invoicing invoicing_generator
$ script/generate invoicing_ledger billing
--currency=GBP
$ rake db:migrate

Model classes
module Billing
class Invoice < LedgerItem
acts_as_invoice
end
class CreditNote < LedgerItem
acts_as_credit_note
end
class Payment < LedgerItem
acts_as_payment
end
end

Ledger items

Ledger items
• Invoice:
“you owe us money”

Ledger items
• Invoice:
“you owe us money”
• Credit Note:
“oops, billed you too much”

Ledger items
• Invoice:
“you owe us money”
• Credit Note:
“oops, billed you too much”
• Payment:
“thanks for the cash”

acts_as_ledger_item
module Billing
class LedgerItem < ActiveRecord::Base
acts_as_ledger_item
has_many :line_items,
:class_name => 'Billing::LineItem'
belongs_to :sender,
:class_name => 'Company'
belongs_to :recipient,
:class_name => 'Company'
end
end

Fine, but
so what?

http://www.flickr.com/photos/26614375@N00/381941029/

Avoid writing
boring code

Displaying an invoice
class BillingController < ApplicationController
def document
@document = Billing::LedgerItem.find(params[:id])
respond_to do |format|
format.html {
render :text => @document.render_html,
:layout => true
}
format.xml {
render :xml => @document.render_ubl
}
end
end
end

Displaying an invoice
class BillingController < ApplicationController
def document
@document = Billing::LedgerItem.find(params[:id])
respond_to do |format|
format.html {
render :text => @document.render_html,
:layout => true
}
format.xml {
render :xml => @document.render_ubl
}
end
end
end

Best practices

Your investors will
want to see
your accounts

What accountants
need to know
• Exact dates and periods of
invoices & payments
• Reconciling bank statements
• Details of VAT & other tax

http://www.flickr.com/photos/8704943@N07/3491779722/

Dates & periods
create_table "ledger_items" do |t|
t.string "type"
t.integer "sender_id"
t.integer "recipient_id"
t.string "currency", :default => "GBP", :null => false
t.decimal "total_amount", :precision => 20, :scale => 4
t.decimal "tax_amount", :precision => 20, :scale => 4
t.string "status", :limit => 20
t.string "description"
t.datetime "issue_date"
t.datetime "period_start"
t.datetime "period_end"
t.datetime "created_at"
t.datetime "updated_at"
end

Dates & periods
create_table "ledger_items" do |t|
t.string "type"
t.integer "sender_id"
t.integer "recipient_id"
t.string "currency", :default => "GBP", :null => false
t.decimal "total_amount", :precision => 20, :scale => 4
t.decimal "tax_amount", :precision => 20, :scale => 4
t.string "status", :limit => 20
t.string "description"
t.datetime "issue_date"
t.datetime "period_start"
t.datetime "period_end"
t.datetime "created_at"
t.datetime "updated_at"
end

Invoice (“bill”)
≠
Payment (“receipt”)

Invoice ≠ Payment
Your Sales Account
Customer Account
Your Bank Account

Invoice ≠ Payment
Your Sales Account
–
Invoice
+
Customer Account
Your Bank Account

Invoice ≠ Payment
Your Sales Account
–
Invoice
+
Customer Account
–
Payment
+
Your Bank Account

Account statement
No. Date Description Amount
100 2009-06-01 Subscription for June £115.00
101 2009-06-24 Referral fee – thanks for inviting 3 friends –£10.00
102 2009-06-30 Credit card payment including PAYG credit –£200.00
Current account balance (GBP) –£75.00
Charges not yet invoiced
Description Amount
Pay As You Go charges so far this month £23.45

Account statement Invoice
No. Date Description
Credit Note
Amount
100 2009-06-01 Subscription for June Payment
£115.00
101 2009-06-24 Referral fee – thanks for inviting 3 friends –£10.00
102 2009-06-30 Credit card payment including PAYG credit –£200.00
Current account balance (GBP) –£75.00
Invoice
Charges not yet invoiced
(with status=open)
Description Amount
Pay As You Go charges so far this month £23.45

Account statement
class BillingController < ApplicationController
def statement
scope = Billing::LedgerItem.
exclude_empty_invoices.
sent_or_received_by(params[:id]).
sorted(:issue_date)
@in_effect = scope.in_effect.all
@open_or_pending = scope.open_or_pending.all
@summary = Billing::LedgerItem.account_summary(
params[:id])
end
end

Thomas Hawk, http://www.flickr.com/photos/thomashawk/2317826708/

VAT

Your Sales Account VAT Account
Customer Account
Your Bank Account

Your Sales Account VAT Account
– –
Invoice
+
Customer Account
Your Bank Account

Your Sales Account VAT Account
– –
Invoice
+
Customer Account
–
Payment
+
Your Bank Account

Your Sales Account VAT Account
– – +
Invoice
+ VAT
Customer Account Return
–
Payment
+ –
Your Bank Account

Urgh.
(And we’ve not even started talking about EU
VAT regulations yet.)

VAT made easy
create_table "ledger_items" do |t|
t.string "type"
t.integer "sender_id"
t.integer "recipient_id"
t.string "currency", :default => "GBP", :null => false
t.decimal "total_amount", :precision => 20, :scale => 4
t.decimal "tax_amount", :precision => 20, :scale => 4
t.string "status", :limit => 20
t.string "description"
t.datetime "issue_date"
t.datetime "period_start"
t.datetime "period_end"
t.datetime "created_at"
t.datetime "updated_at"
end

VAT made easy
create_table "ledger_items" do |t|
t.string "type"
t.integer "sender_id"
t.integer "recipient_id"
t.string "currency", :default => "GBP", :null => false
t.decimal "total_amount", :precision => 20, :scale => 4
t.decimal "tax_amount", :precision => 20, :scale => 4
t.string "status", :limit => 20
t.string "description"
t.datetime "issue_date"
t.datetime "period_start"
t.datetime "period_end"
t.datetime "created_at"
t.datetime "updated_at"
end

VAT made easy
create_table "ledger_items" do |t|
t.string "type"
t.integer "sender_id"
t.integer "recipient_id"
t.string "currency", :default => "GBP", :null => false
t.decimal "total_amount", :precision => 20, :scale => 4
t.decimal "tax_amount", :precision => 20, :scale => 4
t.string "status", :limit => 20
☺
t.string "description"
t.datetime "issue_date"
t.datetime "period_start"
t.datetime "period_end"
t.datetime "created_at"
t.datetime "updated_at"
end

VAT made easy
# New in invoicing gem version 0.3
class MyProduct < ActiveRecord::Base
acts_as_taxable :price,
:tax_logic => Invoicing::Countries::UK::VAT.new
end
p = MyProduct.new :price => 10
p.price_with_tax_info
# => "£11.50 (inc. VAT)"
p.price_taxed = 23.00
p.price.to_s
# => "20.0"

Paolo Màrgari, http://www.flickr.com/photos/paolomargari/3050305454/

Overview of your
customers

Sales and purchases ledger
Sale Purchase
Name Currency Sales Purchases Balance
receipts payments
A. N. Other GBP £400.00 £0.00 £400.00 £0.00 £0.00
Some Customer GBP £0.00 £395.00 £0.00 £250.00 –£145.00
Some Customer USD $2,782.31 $0.00 $2,160.61 $0.00 $621.70
Widgets Ltd GBP £229.63 £12.00 £300.00 £0.00 £82.37

Sales/purchase ledger
@summaries =
Billing::LedgerItem.account_summaries(params[:id])
@summaries.each_pair do |id, by_currency|
by_currency.each_pair do |currency, data|
puts "Sales: #{data.sales_formatted}"
puts "Purchases: #{data.purchases_formatted}"
# ...
end
end

What else?

Martin Kleppmann, http://www.flickr.com/photos/martinkleppmann/3131198770/

¥1,300
Martin Kleppmann, http://www.flickr.com/photos/martinkleppmann/3131198770/

Currency
formatting

Currency formatting
inv = Billing::MyInvoice.new :currency =>
'JPY'
nov = Billing::LineItem.new(
:description => 'November charge',
:net_amount => 10,
:tax_point => '2008-11-30')
inv.line_items << nov; inv.save!
nov.amount_formatted
# => "¥10"
inv.currency = 'GBP'
nov.amount_formatted

Nothing is
constant

VAT change 1/12/09
dec = Billing::LineItem.new(
:description => 'December charge',
:net_amount => 10,
:tax_point => '2008-12-01')
inv.line_items << dec
nov.amount_taxed_formatted
# => "£11.75"
dec.amount_taxed_formatted
# => "£11.50"

Johnny Vulkan, http://www.flickr.com/photos/26614375@N00/381941029/

Integrating with
payment gateways
http://activemerchant.org

Open
standards

Displaying an invoice
class BillingController < ApplicationController
def document
@document = Billing::LedgerItem.find(params[:id])
respond_to do |format|
format.html {
render :text => @document.render_html,
:layout => true
}
format.xml {
render :xml => @document.render_ubl
}
end
end
end

Displaying an invoice
class BillingController < ApplicationController
def document
@document = Billing::LedgerItem.find(params[:id])
respond_to do |format|
format.html {
render :text => @document.render_html,
:layout => true
}
format.xml {
render :xml => @document.render_ubl
}
end
end
end

Displaying an invoice
class BillingController < ApplicationController
def document
@document = Billing::LedgerItem.find(params[:id])
UBL? WTF?
respond_to do |format|
format.html {
render :text => @document.render_html,
:layout => true
}
format.xml {
render :xml => @document.render_ubl
}
end
end
end

UBL = “Universal
Business Language”
OASIS Open Standard

UBL: If you’re working with
invoices and purchase orders
and that kind of stuff (and who
isn’t?) [...] Look no further.
@timbray: “Don’t Invent XML Languages”
http://tr.im/NoNewXML

UBL Example (1/3)
<ubl:Invoice xmlns:ubl="..." xmlns:cbc="..."
xmlns:cac="...">
<cbc:ID>1</cbc:ID>
<cbc:IssueDate>2008-06-30</cbc:IssueDate>
<cac:InvoicePeriod>
<cbc:StartDate>2008-06-01</cbc:StartDate>
<cbc:EndDate>2008-07-01</cbc:EndDate>
</cac:InvoicePeriod>
<cac:AccountingSupplierParty> ...
</cac:AccountingSupplierParty>
<cac:AccountingCustomerParty> ...
</cac:AccountingCustomerParty>
...

UBL Example (2/3)
<cac:TaxTotal>
<cbc:TaxAmount currencyID="GBP">
15.00
</cbc:TaxAmount>
</cac:TaxTotal>
<cac:LegalMonetaryTotal>
<cbc:TaxExclusiveAmount currencyID="GBP">
100.00
</cbc:TaxExclusiveAmount>
<cbc:PayableAmount currencyID="GBP">
115.00
</cbc:PayableAmount>
</cac:LegalMonetaryTotal>

UBL Example (3/3)
<cac:InvoiceLine>
<cbc:ID>42</cbc:ID>
<cbc:LineExtensionAmount currencyID="GBP">
100.00
</cbc:LineExtensionAmount>
<cac:Item>
<cbc:Description>
Subscription for my fantastic app
</cbc:Description>
</cac:Item>
</cac:InvoiceLine>
</ubl:Invoice>

Designing XML Languages is
hard. It’s boring, political, time-
consuming, unglamorous,
irritating work.
@timbray: “Don’t Invent XML Languages”
http://tr.im/NoNewXML

Interoperability

OAccounts
Sage Invoicing gem
MYOB Payment provider
KashFlow Shopping cart
Xero Custom reporting

OAccounts
Sage Invoicing gem
MYOB Payment provider
OAccounts
KashFlow Shopping cart
Xero Custom reporting

OAccounts
=
UBL + XBRL-GL + REST +
Conventions +
Documentation +
Collaboration +
Open source implementation

OAccounts
=
UBL + XBRL-GL ts. REST+ or g/ +
Conventionsco un +
://o ac
ht tp
Documentation +
Collaboration +
Open source implementation

Image credits
Screenshots of:
http://basecamphq.com/signup, http://freshbooks.com/pricing.php, http://fogcreek.com/FogBugz/,
http://github.com/plans, http://lessaccounting.com/pricing, http://freeagentcentral.com/pricing,
http://huddle.net/huddle-price-plans/, http://twitter.com/bensummers/status/1199722134,
http://oneis.co.uk/, http://bidforwine.co.uk
Building site: Richard Messenger, http://www.flickr.com/photos/richardmessenger/2626927255/
Tim Bray: http://en.wikipedia.org/wiki/File:Tim_Bray.jpg
Pile of money: Johnny Vulkan, http://www.flickr.com/photos/26614375@N00/381941029/
Astronomical clock: magro_kr, http://www.flickr.com/photos/8704943@N07/3491779722/
Tax Service: Thomas Hawk, http://www.flickr.com/photos/thomashawk/2317826708/
Man in a shop: Paolo Màrgari, http://www.flickr.com/photos/paolomargari/3050305454/
Hands full of money: Marshall Astor, http://www.flickr.com/photos/lifeontheedge/2672465894/

Thank you!
Martin Kleppmann
http://go-test.it
http://yes-no-cancel.co.uk
http://twitter.com/martinkl