Question: What needs to be set up to process and pay a royalty?
Answer: To process royalties, perform the following steps:
If you want to post to the general ledger for royalties calculated by supplier receipts, select the Post Royalties to G/L check box in Purchasing Control Maintenance, and enter default royalty expense and accrual accounts.
In Royalty Region Maintenance, set up royalty regions for countries that have the same royalty rates.
In Country Maintenance, assign royalty regions to countries.
In Royalty Book Maintenance, set up royalty books for groups of suppliers that have the same royalty rates.
In Supplier Maintenance, assign royalty books and royalty accounts for each supplier.
In Royalty Deal Maintenance, set up royalty deals for royalty deals or agreements.
In Royalty Class Maintenance, set up royalty classes to associate with products (only if you need to group similar products together for royalty rate calculations).
In Product Maintenance, assign a royalty class to each product that has a royalty arrangement if you need to group similar products together for royalty rate calculations.
In Royalty Rate Maintenance, set up effective dates and royalty rates for products and royalty suppliers. Royalties can be calculated based on customer invoices or supplier receipts.
In Invoice Create and Print, create invoices with royalty products during the effective dates of royalty rates.
In Invoice Post, post royalties calculated by customer invoice.
In Receiving Entry, create receipts with royalty products during the effect dates of royalty rates.
In Inventory Receipt Post, post royalties calculated by supplier receipts.
In Royalty Report, output the report to display the royalties that are due to the royalty suppliers for a specific period.
In Voucher Entry, enter royalty amounts to be paid for each royalty supplier.
Question: What if, after reviewing the Royalty Report, there are mistakes that need to be corrected (wrong or missing royalties, wrong royalty suppliers, etc.)?
Answer: Use Royalty Invoice Update to correct the existing royalties, and then reprint the Royalty Report.
Question: If a royalty rate record is set up for a product/supplier, this same product is in a royalty class with this same supplier, and it has a rate record in the same effective date range, what happens?
Answer: The royalty rate of the product/supplier is used instead of the royalty class/supplier rate.
Question: What cost method is used for calculating royalties?
Answer: The sales reporting cost method is used to calculate royalties. You can set up the sales reporting cost method in Product Maintenance and Product Location Maintenance.
Question: How are prices calculated for royalties based on percentages rates for component products?
Answer: Prices are calculated as follows:
If a price is entered in the Default Regular Price field in Customer Service Control Maintenance and the related price is not zero in Product Location Maintenance, that price is used as the component product's price when calculating percent royalties.
If the Default Regular Price field is blank or the related price is zero in Product Location Maintenance, List Price 1 entered in Product Location Maintenance is used.
If List Price 1 is zero, the software will attempt to calculate a price based on the component’s percent allocation.