Karma Boost: How Leapfin Helps Reddit Stay Accounting-Ready

Reddit is a network of over 100,000 communities where people can get their questions answered and discuss nearly any topic imaginable. Founded in 2005, its unique, community-based model and 19 year corpus of human-generated content make it a valuable source of information, news, and entertainment. Reddit had a successful Initial Public Offering (“IPO”) in March 2024 and has continued to scale its business and platform with community at the forefront.  

The Challenges

Reddit’s revenue model has evolved and diversified over the years. Today, Reddit generates substantial revenue through advertising and, to a lesser degree, from data licensing, Reddit Premium subscriptions, and products within its user economy. With nearly 100 million Daily Active Users, the scale of Reddit’s revenue transactions is massive, estimated in the hundreds of millions per year. 

Capacity Constraints and Insight Limitations

Prior to Leapfin, Reddit’s accounting team relied on manual processes, their time largely consumed by managing separate Excel workbooks for multiple payment processors. Their workflow to consolidate, standardize, and reconcile revenue data was inefficient, and they would max out Excel. 

Additionally, each processor’s different data formats and reporting timelines limited the team’s ability to provide granular insights. When Reddit sales leaders needed visibility into daily sales figures and revenue by geography, manually preparing these reports was simply not feasible. 

Over time, these manual processes created a bottleneck that got in the way of the team meeting accelerated close timelines, providing timely decision-making, and supporting value-add projects. 

Scalability to Support Business Growth

Accounting and Finance are critical to supporting the rollout of user-facing products and features on Reddit’s platform. New products, packages, and incentives impact revenue recognition requirements. Reddit’s rapid growth and product expansion put significant pressure on the team to stay agile and flexible. A scalable, adaptable revenue solution was essential to ensure the finance team remained aligned with the company’s growth.

Revenue Complexity and Compliance Risk

Reddit’s evolving product offerings introduced nuanced revenue recognition needs. Differentiated revenue types require specific rules for net versus gross calculations. With audits approaching and internal accuracy standards rising ahead of becoming a public company, the revenue accounting team faced a heightened focus on ensuring journal entries were correct. The team needed a solution that could help them stay ready and confident to meet expectations from stakeholders. 

The Solution

Reddit chose Leapfin to be their accounting-ready revenue data platform and partner. Leapfin stood out for three main reasons.

First is Leapfin’s proven capability to aggregate and standardize complex revenue transaction data at scale from all payment providers.

Second, Leapfin provided Reddit’s team with a single, auditable source of truth for all their revenue data, empowering them to answer complex and urgent business questions.

Third, Leapfin’s automation capabilities meant Reddit could efficiently support new products and revenue streams without adding significant manual work or requiring additional engineering resources.

The Results

Leapfin’s impact on Reddit’s finance operations was felt quickly across several meaningful metrics.

Improved Data Accuracy and Audit Readiness

By automating the consolidation of all payment processor data into one system and automatically creating accurate journal entries, Leapfin significantly reduced the risk of manual errors. Reddit’s audit readiness also improved, as entries and periods can be locked, eliminating the need for human intervention when numbers change and minimizing audit scrutiny. This improved accuracy has provided greater confidence for internal and external auditors, helping Reddit meet high compliance standards with fewer bottlenecks during audit periods.

Accelerated Month-End Close and Reduced Manual Workload

Leapfin’s automation cut down over eight hours of manual work per month, helping Reddit’s finance team reduce its month-end close from day six to day three. By eliminating tasks like data downloads and manual reconciliation, the team gained time to focus on more strategic, value-add activities. This acceleration and reduced manual workload have enabled Reddit’s finance team to meet tighter timelines, aligning closely with internal goals for faster, more efficient financial reporting.