I produce software and this is given to another company to sell.
Each month they send me a statement of how much I have earned but it is 90 days in behind .
For example in December I received the payout report from October.
As I am not making invoices for this, when do I record this, do I record the payment from there October sales in October when I receive payment in December ?
Accounts are prepared on accrual basis ( when revenue and expenses are recognised not actually recived or paid)
Are you putting the software onto CDs which they sell or are they selling downloads?
That is concerning. As I will see number of what they have sold, but as it will be dollars and they deduct there share as well I can’t know what it will be in Sterling or the share I receive. Till 3 months after the end of that month.
I will try work on that basis. But am unsure as to how as do I create an invoice for it as it is in dollars also the invoice is not sent to them?
I don’t mind if I have to pay to discuss this with some one as it is very important that I get it right.
They are selling donwloads
You dont need to raise invoices as such, just have a look at statement from them for point of sale, value of sale, convert it to £, same goes for their commission, if value is different from what you actually receive in £ after 3 months then difference is either gain or loss in currency exchnage
I sell software licenses in similar model. The company provides me with report of number of licenses sold, commission etc and a PDF with credit note which just contains the net income (turnover less commission less fees). I take that value and create sales invoice.
I think you should create that invoice in the month where you receive a report (e.g. on the day it is dated or end of month) and set its payment due date to the 90 days.
So your revenue will be recognized and the outstanding payment will be shown as your company asset (Debtors Control Account).
In QuickFile you can enable multiple currencies so you can record your invoice in USD to match your license reports currency. This will be automatically converted by QuickFile to GBP for accounting purposes.
When you receive a payment just log it to the sales invoice and QuickFile will add currency loss/gain automatically.