I’m looking for ideas on a simple way to manage royalty fees that we will owe to a 3rd party licensing agent for stock items we are purchasing from a vendor (a separate entity from the licensing agent).
Ideally these costs would be added to the inventory asset value but also generate an accounts payable due to the third party anytime the inventory item is received. We do this in other cases, but in those situations the licensor is supplying us with a royalty tag that is applied to the stock item and we’re using manufacturing to assemble a new stock item from the item we purchase and the royalty tag
In this new situation, the vendor we purchase the stock item from will apply the royalty tag on our behalf, but we need the liability costs to hit our AP as soon as the goods are received.
I believe we might be able to use landed costs, although that is somewhat complex to manage and I’m not sure it would automate the AP upon receipt. We could also dummy this by following the production workflow, but in this case we wouldn’t have a physical tag to apply and would have to keep detailed records outside the system, which I’m generally not a fan of
Again - looking to purchase a stock item from Company A but add value to that inventory asset with an offsetting AP liability to Company B at the time of receipt.
Does anyone have a similar situation and solution they could share or any thoughts on how to peel this potato? 😉
