QuickBooks® Accounting Software Royalty Case Study
Q - I have a new client who is a sole proprietor, a literary agent with 20 clients (writers) each having several books. The books are sold to publishers and/or optioned by movie companies. A contract price for a book can be paid over several months, depending on the deal. So she would like to track her clients/their projects and money paid and owed. All the money comes in to her and she in turn pays out royalties to the writers and at times commissions to managers. Could you tell me how you would set this up?
A – A couple things come to mind immediately: keeping track of the deals by job, potentially using the class feature, and the unpaid bills by job report available in the Premier: Contractor and Accountant Edition products.
Customer:Job List
For starters, I would use the customer:job list to track the customer (i.e. writer) and the individual jobs (i.e. book or movie deals). This will result in a Profit & Loss by Job to see how each deal is going, as well as the profitability of working with the writer in total.
Invoices
If the amounts will be due at specific times, each invoice can be created for each “job” or deal with the Publisher or Movie Company as the “Bill To” address and the “Ship To” address can be used for the author, literary work, contract number, or whatever additional information will need to appear on each invoice. Each invoice should have the appropriate due date.
Class Feature
Without some additional information regarding the class feature, I am not sure what would be the best for the client. I would however, recommend having the discussion. Is there an additional way that tracking profitability would be useful for the client? Maybe using the class feature for the type of deal (i.e. are book deals more profitable than movie deals), first time versus veteran authors, etc.
Unpaid Bills by Job
As the invoices are entered, the corresponding bills for the royalty payments can be entered. The “Unpaid Bills by Job” report is only available in the Contractor and Accountant Editions of QuickBooks Premier. It is not available and cannot be easily created in the other QuickBooks products. The advantage of the report for this client is it will be easier to see who needs to be paid royalties as payments are received on each deal.
About the Author
As a resource for this and other questions, submit a question via *Ask the Expert* or attend our free, monthly discussion forum tele-class at http://www.4luvofbiz.com.
Bonnie J. Nagayama, CPA has been featured by Intuit in their QuickBooks Advisor Spotlight and frequently teaches and consults on using QuickBooks to its maximum advantage. For a FREE weekly newsletter of QuickBooks tips and tricks, plus many free and low cost QuickBooks resources visit http://www.4luvofbiz.com
Tell others about
this page:
Comments? Questions? Email Here