Liability Accounting
Note: this feature is available in the Lyric and Epic Editions only.
Overview
Publishers' Assistant tracks financial transactions in a historical fashion. Liability transactions are logged as a result of either an order or a receipt. If your royalty contract for a title specifies that that the royalty is due when an item is shipped, then the liability transaction will be logged when you ship an invoice in which the title is ordered. If the royalty is not due when shipped, then logging a receipt which pays for the item will cause the liability transaction to be logged. If the royalty is due when shipped but you receive less than expected in payment from the customer, then an adjustment transaction may be logged at the time you enter the receipt.
One major difference between the Sonnet and the Lyric and Epic editions is that the Sonnet Edition does NOT do historical tracking of liability transactions. Instead, in the Sonnet edition, liabilities are calculated when you generate one of the liability reports (e.g. the "Author Royalty Summary" report). On the surface this may not seem like much of a difference. Sonnet still gives you your liability reports, so why bother with historical tracking of liabilities? There are some significant advantages to historical tracking:
Advantages to historical tracking of liabilities
Historical tracking allows you to log payments as well as liabilities
In a growing publishing business, you may find yourself working with authors, suppliers, and sales representatives in more than one capacity. For example, you may need to pay authors or suppliers at different intervals. If your selling hundreds of titles, how do you keep straight who you've paid and who you haven't at each interval? Or perhaps you'll need to credit authors for books they have purchased back from you. The ability to log payments means that you'll always have an accurate accounting of where you stand with authors, suppliers, and sales representatives. You won't have to worry about how often or exactly when you decide to pay them, because the accounting system will track your payments at any time.
You'll be able to change your royalty and consignment contracts at any time
If you are generating your liability figures from a report, then the report can only work from the current liability schedules that are loaded. If you normally pay royalties every 6 months, then a change in the royalty schedule will affect all sales since the last reporting period. If the royalty rate is set higher, that could cost you some serious money! By contrast, historical tracking allows you to make changes to these schedules at any time — without affecting the liability transactions that have already been logged. If you do need to make a change effective to an earlier date, you can use the "Recalculate Liabilities" option in the "Finance"|"Payables" menu to regenerate the selected sales back to the effective date. The point here is that the choice will be yours.
You'll be maintaining more of your businesses critical data in one place
When tax time rolls around, you'll have more of what you need at your fingertips from one source.
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