Royalty Set Up & Reporting Overview

Your royalty reporting needs will dictate how you initialize the Royalty module, define the royalty rates and link products and licensors to those rates. The following list provides many of the options available:

• Royalties paid upon issue of the invoice (the preferred method) or upon payment of the invoice (more involved in managing/monitoring because multiple royalty records can become eligible for payment when a single invoice is paid).

• Royalties paid to a single licensor or to multiple licensors for each unit sold.

• Royalty rates may be the same no matter where the product is sold or they may vary depending on the customer's province or state.

• Royalty rates based on the order type (regular, FOB or sample) can be defined for each combination of licensor and province/state.

• Royalties will be paid on sales to all customers unless a customer is listed as exempt for a specific licensor in Maintain Royalty Exemptions (SA08).

• Royalty will not calculate if the product is a component of a model or assembled set. A record is written to the 'unpaid royalty' file (SAUR) but the royalty amount is zero (because the line extension for the component is zero on the invoice).

• Royalty will calculate for an assortment item (AI product type) per the weighted value in the royalty rate record in Maintain Royalty Rates (SA05).

• Royalty is calculated and royalty records are written to the unpaid royalties file (SAUR) by Invoice Scheduling/Credits (IN43).

• Maintain Unpaid Royalties (SA57) allows you to create, modify or delete royalty records.

• Print Outstanding Royalties (SA58) allows you to report unpaid royalty records by licensor/product/ invoice. SA58 does not have current/next month logic and is not tied to month-end or running Close Sales Fiscal Period (SA89); SA58 reports unpaid royalty records for the 'up to invoice date' entered by the operator.
  • If you pay royalty upon payment of the invoice, then choose restriction 3-Print Paid Invoices Only when printing SA58. If the outstanding balance of the invoice is zero, then the royalty amount is deemed payable by SA58 and the royalty record is reported.

  • If you pay royalty upon issue of the invoice, then all unpaid roaylty records reported are deemed payable, no matter if they are fully paid or not.

  • For more information on the unpaid royalty file, please see the About the Unpaid Royalties File help topic.

• Upon acceptance of the SA58 Royalty Report, you can optionally choose to archive the reported royalty records and link to Accounts Payable to automatically create an invoice to the licensor for royalty payable or you can choose to archive only.

• Archived royalty records can be purged from the history file using Purge Royalty Archive (SA61).

Setting Up Royalty Codes and Reporting:

1. Set the 'Payable Upon Receipt of Payment' field in Company Control Initialization (CC00/Order Entry) to determine when royalty payments are made. When this check box is selected, royalties are payable when the invoice has been paid. When this check box is not selected, royalties are payable once the invoice has been issued.
   • Note: When this check box is selected, royalties are only paid when the outstanding balance of the invoice is zero.

2. Set up licensors in Maintain Vendors (AP13).
   • Each licensor must be set up as a vendor in AP13.

3. Set up royalty rates in Maintain Royalty Rates (SA05).
   • The key to the royalty rate record is the royalty code + licensor + province/state. You can create multiple royalty rate records for the same licensor by assigning a different province or state to each royalty record. For example, you can have different royalty rates for the licensor depending on the location (province/state) of the sale.

   • Within each royalty rate record, you can maintain rates by order type, i.e. regular, FOB and sample.

   • You can list multiple licensors for a single royalty code.

   • The product to which the royalty rate is assigned must have a primary supplier set up in Maintain Purchasing Info (PO13). Note: If the product does not have a primary supplier assigned, then royalties will not be calculated.

4. Assign royalty rates to products using the 'Royalty Code' field in Maintain Inventory Master (IM13/Selling), as required.

5. Link the royalty rate record to the Accounts Payable (AP) invoice generation routine:
   • In SA05, the licensor must be a valid vendor set up in AP13.

   • Upon acceptance of SA58, you have the option to automatically generate AP invoices for the royalty payable. If selected, then SA58 will interface with AP30 for automatic creation of royalty invoices.

   • In Maintain Operator Password/Privilege (CC03), ensure that the operator authorized to run SA58 is also authorized to run AP30.

Note: If you are NOT using SA58 for royalty reporting please take note that the system is designed to accumulate records in the SAUR file until the records are reported and archived by the acceptance routine of SA58. It is recommended that you delete records from the SAUR file periodically using Maintain Unpaid Royalty (SA57) to recall royalty records for a licensor and then delete the records using the Delete Header icon .