Royalties would typically be an Expense. So you could simply set up something like "ABC Royalties" and that is where you would apply the payments when you make them to show the Expense.
If there is something different about the arrangement like they bill you annually but you only pay monthly or quarterly, then you could set up a Liability account for the initial invoice. And then move from the ABC Liability to the ABC Expense Acct when you actually make the payments.
