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Overview

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Overview

Ad Magic uses the Royalty module to calculate the royalty payable to designers. The royalty is calculated for every designer base on the channel of their item being sold.

Setup

• Set up Designers as Salesforce Accounts

• Owned or Consignment???? By Order????

• Set up Royalty Rate by Item, Designer/Vendor, and Channel Type

• Set up a service item for Purchase Invoice

  • Update Company Setup ‘Royalty Payment Service Item’ field to link to this service item.

• Royalty Rate Setup

  • Game - : Designer’s game (Item)

  • Designer/Account/Vendor - Designer/Vendor account

  • Sales Channel - Pickst list with values “Retail” and “Wholesale”

  • Rate - Nummeric field represent % if Rate Type is ‘Percentage’, $ Amount if Rate Type is ‘Fix Amount per Unit’

  • Rate Type - Pick List with values: “Percentage” and ”Fix Amount per Unit”

  • COG - Cost of good : Points to the Account table.

  • Sales Type: A picklist with the values “B2B” or “B2C”

    • Values are from Total Sales.

    • Total Sales defaults Sales Type to “B2C” when Sales Orders are from Shopify. If it’s not from Shopify, it will default to “B2B”.

    • Ad Magic has a routine to create GF Sales Orders from Total Sales. The routine must populate the Sales Type field.

    • If a Sales Order is created manually, the Sales Type defaults to “B2B” but can be changed.

  • Rate Type: A picklist with values “%” or ”Unit”

  • Rate:

    • The numeric field will be a percentage if the Rate Type is '%’

    • The numeric field will be the $ amount per unit if the Rate Type is ‘Unit'.

  • Unit COGS: Cost of goods sold per unit.

  • Deduct COG - COGS: If Checked, the system will deduct the total of cost of good sold (COG * Invoiced Qty) from rotyalty goods sold from the royalty amount.

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Royalty Calculations

1. Navigate to Royalty CalcualtionCalculation

2. Click “Calcualte Royalty” the Calculate Royalty button

3. Moth Month End defaults to the preious previous month’s last date.

4. System will:

   1. Gather all games (items) with a royalty rate setup

   2. Retrieve all Sales Invoice Lines with the following criteria:

      1. Sales Invoices' Document Status = Posted

      2. Item gathered in setup a

      3. Does Items that are set up in the Royalty Rate Setup table

      4. The invoice lines do not have a Royalty Calculation Line linked

      5. Posting Date <= the Month End date

• Each unique combination of Year/Month and Designer account , the Designer Account and GL Ledger will have a Royalty Calcualtion headerCalculation.

• Royalty Amount calculation logic:

  • Line COGS = Invoiced Qty. * Unit COGS

  • If Deduct COGS is checked:

    • Then Royalty Amount = Royalty Amount - Line COGS

  • If Royalty Rate’s Rate Type setup is “Percentage” “%”:

    • Then Royalty Amount = Sales Amount * Rate / 100

  • If Royalty Rate’s Rate Type setup is “Fix Amount per Unit” “Unit”:

    • Then Royalty Amount = Invoice Invoiced Qty. * Rate

  • If Deduct COG is checked and COG field is not blank in Royalty Rate setup

    • Then Royalty Amount = Royalty Amount - COG

      • COG field in Royalty Calcualtion Line object is calcualted using COG in the Royalty Rate * Invoice Qty.

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• • Multiple Royalty Calculation Lines will be created if more than one designer is set up to receive royalty payment for one particular item in the Royalty Rate Setup table.

• Manually enter Royalty Payments. (Automation is possible)

• Ad Magic reviews and then pays the Remaining Payment. (Automation is possible)

Fields List: Royalty Calculations

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Fields List: Royalty Calculations Line

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Royalty Calculations

• Use Commission Journal with header and lines.

• Monthly routine to calculate Royalty based on Royalty Setups and Posted Sales transactions.

• Review, then finalize the month.

Channel Type

In Total Sales:

• Default Channel Type to Retail when sales orders are from Shopify????

  • Amazon????

• Default Channel Type to Wholesale when sales orders are not from Shopify

Next Steps:

• Copy GoldFinch commission module to Ad Magic UAT.

• Adjust the code based on recent discussions.

• Ad Magic to populate Commission Setups, then test the program.

Security

Only users who are allowed to access Accounting Seed can access the Royalty Calculation module.

Create Purchase Invoices

1. Navigate to Royalty Calculation

2. Click the Create Purchase Invoices button

3. ‘Month End’ defaults to the previous month’s last date.

4. System will:

   1. Retrieve all Royalty Calculation Lines with the following criteria:

      1. The Royalty Calculation Lines do not have a Purchase Invoice Line linked

      2. End of Month <= the Month End date

   2. Get Division from the Sales Invoice Line. The system will use the Division from the Sales Invoice if the Division is blank on the invoice line.

5. Each unique combination of Division, Year/Month, and Designer account will have a Purchase Invoice.

6. Navigate to the Purchase Invoices page to review the newly created Purchase Invoice under the “Open Royalty Payment” list view.

   1. After the purchase invoice is posted, it will appear under the ‘Posted Royalty Payment’ list view.

Royalty Payments

Create Vendor Payments every quarter.