This FAQ will show you how to setup and process Literary Royalty Payments.
On the accounting record create the following residual lines.
A. Amateur and Professional at 0% commission rate.
B. Book at 10% commission rate.
C. Commission at 100% commission rate.
*NOTE – For 1099s, payments applied to Residual fee type lines will go into the Royalties Box on the 1099 forms.
Using the following example where Check #1 the buyer/payroll has deducted your commission for Amateur and Professional Royalties and are paid in a separate check, (Check 2).
Select the Amateur & Professional residual line and click apply payment.
Since your commission was already deducted and comes separately use the Net amount of these items as the Gross and Net amounts. In this example $372 + $186 = $558.00. Save when finished.
Select the Book line and click apply payment.
For the Book royalties your commission the payment is entered as normal, the Gross is the Gross and the Net is the Net. In this example both are $300.00. Save when finished.
Select the Commission residual line and click apply payment.
For the Commission payment on Amateur and Professional royalties the Gross and the Net should be the same as it’s 100% commission. Enter the Gross and Net as normal, save when finished.
If you look at the payment breakdown compared to the running totals at the very bottom of the accounting window they match. The total Gross for the client was $900.00 with $72.00 for commission.