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bjscharf
February 23, 2022
Question

Royalty and Commission reports

  • February 23, 2022
  • 1 reply
  • 0 views

Hello,

 

I have been tasked with creating customized reports for our authors and partners.  For each product we sell, there may be author that gets a royalty (amount or percentage), there may be a partner organization that gets a percentage, and there may be an association which gets a percentage/commission.  So that means for every customer purchase, we may have 3 payments we need to make to authors/partners/etc.  We have been tracking this outside of QB Desktop for a while.  We would like to move to QBO online and try to customize reports to meet our needs if possible.  How are other people tracking and reporting on such situations?  We need to make periodic payments to the authors/partners/etc based on reports or bill or something that shows how much of our income from certain sources is to be split with others.  Our accountant would like me (a programmer) to try to automate this.  I would prefer to use QBO instead of create a custom application if that is possible.

Thank you for your time and advice.

1 reply

DivinaMercy_N
DivinaMercy_N
February 23, 2022

Let's work together to achieve the data you need, @bjscharf.

 

In QuickBooks Online (QBO), you can use the Class Tracking feature to indicate 3 types of payments for authors, partners, associations, etc. Once you create a class item for each of them, you can now add it to the invoice in line with the purchased item of the customer. Before that, you'll have to turn this feature on.

 

After that, set up the class lists for the payment types. Here's how:

  1. In your QBO account, go to the Gear icon and select All Lists. 
  2. Next, choose Classes. Then, click New.
  3. In the Name field enter the name of the payment type. Example: Royalty. 
  4. Repeat the steps for the other payment types. 

 

When done, create an invoice and add the product item purchased by the customer. Once added, select the payment types under the Class column and enter the specific amount for them. I'll show you how:

  1. Select the +New icon and choose Invoice.
  2. Pick the customer's name.
  3. Add the item under the Product/Service column. Since you have 3 payment types, you'll also have to enter the purchased item thrice. 
  4. Next, in the Class column, select each payment type. 
  5. Then, enter the specific amount for each type (please see screenshot for reference). 

 

Once finished, you can run a report by class to see how much of your income is to be split. Then, to modify the report, you can open this article for the detailed steps: Customize reports in QuickBooks Online.

 

Also, saving your report modification is a breeze. To do so, you can simply click the Save customization button. This will let you apply the same formats in the future.

 

Leave a reply below if you have any other concerns about generating reports in QBO. I'm just a post away to help. Have a great day ahead.

    B
    bjscharfAuthor
    February 24, 2022

    @DivinaMercy_N Thank you so much for your reply.  This might indeed be a big piece of the puzzle.  We have some specific questions:

    1.  We need the invoice to list the full price.  We don't show our customers how much gets split off to partners/authors/associations.  Is that possible?

     

    2.  In this solution, it appears that the accountant will need to know by heart all the different rates.  For example Product 1,032 has 11% going to the author and Product 1,033 has 12% going to the author.  This is impossible to memorize.  We would like to enter this information in with the product once and not have to look it up for every transaction.  Is this possible?  To further complicate it, for Product1,033 12% will always go to the author, and 5% may always go to an association, however, the association will differ based on the customer's location.  So this 5% would hopefully be entered into the product, but we might still have to manually type in which association on each transaction.

     

    3.  While I have your attention, the next step after getting the invoice sent is of course getting paid.  In our dreamiest of dreams, we would like to find a way to click a button to say, "These invoices is now paid (maybe by date range),  please generate bills for us to pay these other authors/partners/associations."  Note that we don't pay others until we are first paid by our customers.  

     

    Thank you again for your help.  

     
    MaryLandT
    MaryLandT
    February 24, 2022

    Thanks for getting back to us, bjscharf.

     

    Allow me to step in and share how you can invoice the full price after adding royalty payments.

     

    You can customize the sales form to hide other details and just show the amount due to customers. And, I'm glad to show you how to accomplish this.

     

    1. Select the Gear icon and choose Custom Form Styles.
    2. Locate the default invoice and select Edit.
    3. Go to the Content tab and select the middle section of the template.
    4. Uncheck the Show on invoice box to add the Account summary to your customer's invoice.
    5. Hit Done, once completed.

    You can then send the invoice showing the balance due to your customers.

     

    For customers to pay invoices online, you need to have QuickBooks Payments to do so. You can sign up using this link: Learn how to get QuickBooks Payments. Then, follow the steps from the Sign up through QuickBooks Online section.

     

    There are additional settings that you need to enable, please refer to this article as a guide: Take and process payments in QuickBooks Online. 

     

    Stay in touch with me if there's anything else you need about paying customers with royalties. I'm always right here to guide you @bjscharf.

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