Royalty and Commission reports

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.

@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.  

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.

@MaryLandT ,

Thank you for your response.  I am hoping this is another piece to our puzzle, but I am having trouble following.  I have read dozens of posts today and it may just be that QBO does not have what we need.  When I followed the instructions from above, I get output that #1. includes the royalties as additional amounts.  #2.  shows the royalties to the customer, and #3.  Requires us to enter multiple line items for each product transaction.  We would like to be able to enter this on the item, not the transaction.  I am attaching an image of the input and a pdf of the invoice generated.  Is there any more ideas you might have?

You're welcome, @bjscharf. It's our pleasure to help.

I've already informed MaryLandT about your response and she already updated her answer. Try to check the thread once again. 

Here's detailed guidance on how to create an invoice and on how to record customer payments once you've received them:

• Create invoices in QuickBooks Online
• Record invoice payments in QuickBooks Online

Let me know if you still have questions about your invoices. I'm always here to help. Have a great rest of the day!

Hi @MJoy_D, @DivinaMercy_N, and @MaryLandT ,

I have updated my post above with the input screen and the emailed invoice.  I am sure I am missing something.  Here is how I have my classes set up:

You're about to achieve what you want to happen with your transactions, @bjscharf. 

I'll give you additional instructions so you can record your multiple transactions into one item in QuickBooks Online. This way, you can personalize the class amounts.

Option 1: Create only a parent class, then set up a service category to combine your services. 

Here's how: 

1. Go to the Gear icon on the upper right side. 
2. Select Product and services. 
3. Click the New button and choose Service. 
4. In the Name field, type AR and WV Hospital Association.  
5. In the Class drop-down, pick the Association 
6. You can also add a Category (optional). 
7. Complete the other details, then click Save and Close. 

The invoice and report would look this in the screenshot below: 

Option 2: You can select the sub-class in invoicing so you can run a specific class report. Here's what it looks like: 

Option 3. You can use our Bundle type to add all your classes. This way, you can record them in QuickBooks in one item. Then follow the steps described by Maryland above to display only the balance summary. 

Further, check out these articles below on how to change item types and email customer statements: 

•  Change Product and Service Types.
• Create and send customer statements in QuickBooks Online

Get back to me at any time if you have additional questions. I'm always around here to help. Keep safe, bjscharf.

Can you confirm... you are saying there is not a way to set this up at the product level, it has to be done on each invoice?  With Royalties and Commissions, we pay X% on every product we sell.  It is the same based for every one of their products based on our contract.  Unfortunately we have thousands of products so knowing what the royalty percentage is for each one and being able to enter that on every one of thousands of invoices isn't a feasible solution.  That would be more labor intensive than manually calculating royalties based on sales reports.  What we are wanting is a way to set this up at the product level so everytime one of those books is sold it splits off part of that sale to royalties to be paid.

I understand how important setting up royalties and commissions at the product level in QuickBooks Online (QBO), @Lori119. Let me provide some details about this matter.

Setting up royalties and commissions at the product level directly to automate the process for each sale is currently unsupported. Instead, these are typically handled at the invoice level, requiring manual entry for each transaction as the current approach within the system.

I know this feature could greatly benefit customers managing numerous products with varying royalty rates, and entering this information on every invoice would be labor-intensive. Thus, to address this challenge, I recommend exploring other third-party applications that can perform the task and suit your business needs. You can also utilize the Apps feature within QBO to search for integrated apps and download them. Here's how:

1. Sign in to your QuickBooks Online account.
2. Click the Apps tab on the left navigation menu.
3. Search for the app you wish to connect to in the Magnifying glass bar or select the Browse category ▼ to search for an app by category.
4. Select the App you wish to download, then click the Get App Now button.
5. Authorize the app to connect to your QuickBooks Online.
6. Follow the remaining steps to connect and set up the app settings of your choice.

Additionally, you can generate a report categorized by class to determine the portion of your income that needs to be divided. 

Also, you can tailor the report according to your preferences by customizing them in QuickBooks Online.

Here's an additional reference in case you want to disconnect a third-party app or transfer ownership to another user. 

You're always welcome to reply to this post or create a new post in the Community forum if you have further questions about managing royalties and commissions or other QuickBooks-related concerns. I'll be here to lend a hand. Stay safe!