The “sale” of customer software royalties is typically not a standard transaction in QuickBooks because royalties represent income or revenue your business receives from licensing or selling software. To record income from customer software royalties in QuickBooks, you should use the following steps:
- Set Up an Income Account:
- Go to the “Lists” menu and select “Chart of Accounts.”
- Click “Account” at the bottom and choose “New” to create a new account.
- Select “Income” as the type of account and name it something like “Software Royalties Income” or “Customer Software Royalties.”
- Record the Software Royalties Income:
- Go to the “Customers” menu and select “Receive Payments.”
- Choose the customer or entity from which you are receiving the software royalties.
- In the “Payment Amount” field, enter the amount of the software royalties you’ve received.
- In the “Deposit To” field, select the appropriate bank account where you want to deposit the royalty income.
- Add relevant details such as the payment date and payment method.
- Click “Save.”
- Track Income:
- QuickBooks will now track the income you received from customer software royalties. You can view this income in various reports, such as the Profit and Loss statement.
- 1099 Reporting (if applicable):
- If you are the recipient of software royalties and are subject to IRS Form 1099 reporting, make sure the paying party has your Tax ID or Social Security Number on record. This information will be needed for 1099 reporting.
By following these steps, you can accurately record and track your customer software royalties as income in QuickBooks. Always consult with a certified accountant or tax professional to ensure you are categorizing income correctly and complying with local tax and accounting regulations. Additionally, QuickBooks may have undergone updates or changes since my last knowledge update in September 2021, so it’s a good idea to refer to the latest QuickBooks documentation or reach out to their support team if you have any questions or need assistance with specific features or issues.
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