During the sales import process you have an option to consolidate sales records.
The consolidation process groups similar invoices together prior to importing. Instead of creating 100 records with a quantity of 1 and a total sales amount of a $1,000, consolidation creates 1 record with a quantity of 100 and a sale amount of $1,000.
Advantage: Consolidation reduces the number of sales records and makes royalty statement generation faster.
Disadvantage: With consolidation you lose access to detailed sales information at the invoice level.
If you are a small company there is no reason for you to consolidate sales records. If you are a large company importing several thousand sales records for each product and/or use other tools for sales analysis consider the consolidation option. Consolidation can reduce 100,000 sales records to 5,000 records.
Consolidation Period Options
You can consolidate sales by day, month or period.
If you elect to consolidate sales by period the period should not extend beyond the shortest applicable royalty period.
- If royalties are calculated quarterly the consolidation should be limited to 3 months.
- If royalties are calculated semi-annually the consolidation should be limited to 6 months.
- If royalty contracts have quarterly, semi-annual and annual periods the consolidation should be limited to 3 months (quarterly).
Discount Consolidation Options
Consolidating all records without record to discount will result in sales that show an average discount. If all your royalties are not based on discount you can use this option.
If royalties vary by discount you will want to consolidate sales by discount bands. The royalty software can create a series of equal sized bands or up to five defined bands for discounts.
Example: A royalty rule specifies a lower discount on sales of 60% or greater. Five equal sized bands of 20% would consolidate sales with discounts of 60% or higher separately from lower discounted sales. Or you can define two bands of sales – 0% to 60%, and 60% or greater.