12 Building a print circulations audit system

12.7. An example of a press production and distribution flow

In order to be able to discuss the particularities of an audit system, let me describe briefly the processes, information and documents involved in the press production and distribution system.

The publication “X” is issued on a regular basis by its publisher.

The publication has printed on (its cover) the name (“X”), the frequency of issue, the cover price(s), the subscription rate(s), identification (ordinal) number, and other technical information.

The publication may have mutations (different editorial and advertising contents for different geographical areas of distribution, or different issues, such as morning and evening edition, price mutations, etc.) within the same issue.

The information above makes the given issue uniquely identifiable.

The publisher has a contract with one or more printing facilities, where the given issues of “X” are produced. The contract stipulates, among other information, the price of printing, and the terms of transportation/delivery, quality and payment.

For each issue, the publisher places a printing order to the printing plant. The plant prints the required number of copies of “X”, then delivers them to the locations specified by the publisher. The delivery is accompanied by the necessary documents: delivery notes, routing documents, proofs of handover and receipt of copies, etc.

There may be quality complaints. In these cases, the parties sign a complaint record. The quality complaints are settled later on.

Based on the contract, the printing plant issues an invoice which is sent to the publisher. (It is common to issue invoices for several issues printed.)

The publisher processes the invoice, checks for quality complaints, and eventually settles the invoice. The information and documentation is recorded in the financial/accounting system of the publisher.

Many publishers have their own printing facilities. In each case, the publishers are placing the orders, which are processed by the plants production departments. Internal printing job orders are issued, which will determine the quantity of paper to be consumed (to be taken from the paper warehouse), and other production parameters. After printing, the copies are delivered, and the job records are passed into the administration of the printing plant. Internal administration follows.

The copies of “X” are taken by the distribution systems and delivered to the distribution points (warehouses), and eventually reach their final destinations: mailboxes, racks, newsstands, etc.

“X” can be distributed on a subscription basis, where either the publisher or a subcontractor gathers the data of the subscribers (legal or physical entities): name, address, delivery address, bank account information, number of copies to be delivered, etc. Money is collected in different forms: bank transfer, card or cash payment, etc.

The amount of money collected and other subscriber data determines how many copies will be delivered for a given time period (e.g. a one-year subscription). There are infinite variations of subcription promotions, each one having different rates and terms.

“X” can be sold at newsstands, where the individual buyers are not identified. The newsstand receives a certain amount of copies, and at the end of the selling process a number of copies remain unsold. The newsstand subcontractors send sales and returns reports to the publisher, issue invoices, which are settled by the publisher.

A number of copies of “X” are sent for free by the publishers to various targets: VIP lists, own authors and journalists, advertisers, etc. Some of the copies of “X” are used for marketing and advertising sales purposes, often without any records.

If “X” is a free publication

The subcontractors send regular reports to the publishers on the sales/distribution figures. At the end of the process, the subcontractors issue invoices, eventually settled by the publishers. The rates and other terms are stipulated in distribution contracts.

The administration of the publisher keeps records of all the above information, in order to be able to report on the sales of different types of subscription, as well as for marketing reasons. (For instance, it is good for the publisher to know subscriptions totals per geographical area).

There is a need for reporting to the management of the publisher as well.

Of course, in any given market, things may differ (can be more or less complicated than described above), so be prepared to identify these differences.

In conclusion, a publication is printed (by the publisher itself, or on a contract basis) regularly, transported to different sales/distribution points, sold and/or distributed by the publisher itself. This huge logistical system produces large amounts of information and documents. At the beginning of the process there are systems of data and money collection, and at the end of the process, there is a lot of administration, accounting and reporting.

In terms of a circulation audit systems, here are some critical questions:

• What information from this huge mass of data does an ABC want published?
• Which of the data to be published is fully supported by enough information and documents, in order to pass the verification test? What is verifiable, and what is not?
• How can someone from outside (an auditor) have a clear picture of the processes involved in a distribution system? What will be the job of an auditor?
• Which risks are involved with the audit process?
• Can a publisher fake the figures? How do we handle such a case?

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