NESFA^® Treasury Procedures: Buying in a New Book

Buying in a book is triggered by the receipt of the final bill from the printer with a number of books printed on it. Before you buy in a book you must pay the printer and record the royalty to the author. These are the usual last postings against the book asset account used to accumulate the costs of producing a book. Paying the printer is a simple payment transaction just as for any NESFA bill. Recording the royalty is a general ledger transaction that debits the book asset account and credits the royalty account for the author.

Before you can buy in a book, its asset account must exist. You (or a previous treasurer) must have already created the AS-BOOKnnn book asset account to accumulate the costs of production for the book and all the major costs of that book must have been already entered, so that the AS-BOOKnnn account contains the actual costs to produce the book. For a new book, the book asset account should include payment to the artist (though a few of them have been contracted under royalty agreements and so are handled similarly to payment to the author). The majority of the entries to the book asset account should be costs of printing and shipping for both text and cover, binding charges, possibly charges for galleys (printing and shipping to reviewers), charges for shipping to the clubhouse and to our fulfillment provider, payments for art and text like forewords, and royalties.

If you are buying in a reprint of a previously existing book and the same accounts will be used, skip the following section, and proceed to Sanity Check the Asset Account for the Book.

There must also be a royalty account for the author, RY-author, to accumulate all the author's payments for all their books. This royalty account should exist as it should reflect a debit from the author having been paid their advance. The credit from the knowledge of the number of books printed should leave the amount owed the author as the royalty account balance. We are up to date if the balance of an author's royalty account is zero. A royalty check to an author debits their royalty account.

As an example, for the Yolen 2 book, Once Upon a Time (She Said) the accounts are:

IV-Yolen2
CG-Yolen2
SI-Yolen2
SE-Yolen2
RY-Yolen

Generally speaking, if there are two or more books by the same author, there would be separate IV-, CG-, SI-, and SE- accounts for each book, but only one RY- account for all books by that one author.

Sanity Check the Asset Account for the Book

In Peachtree, select Reports > General Ledger, predefined GL 3...(to be continued...SL)

(check that the royalty and asset accounts are debited and credited as described and not vice versa!)

Set Up the New Inventory Item

Purchase the Books into Inventory

Print out the AS-BOOKnnn account used to accumulate the book's production expenses. Be sure to set the period to cover all the production and royalty expenses. Note the total at the bottom which you will need later. This report also gets filed with a treasury reference number.
Open the form Tasks > Payments. (Do not use Receive Inventory!)
Set the vendor ID to Buy books into inven.

N.B. If the books are bought from another vendor, use that vendor's ID instead of Buy books into inven, e.g., Arisia or Advent Books.

Set the date as close as possible to (but not earlier than) when the books were received.
Set the Cash Account to the AS-BOOKnnn account in which the book's expenses were accumulated.
Fill in the check number using the reference number obtained above.
Fill in the memo field to indicate how many of which book you are buying into inventory.
Select the tab Apply to Expenses.
Fill in the number of saleable¹ books printed in Quantity
Fill in the Item as using the inventory item name which you created, above (or was previously existing).
Important: Clear the Unit Price field.
Fill in the amount you got from the asset account above.
The Unit Price field should now show the cost per unit. If it doesn't, then something is wrong, and you shouldn't proceed until it is resolved.
Click Save (not Print) in the forms menu bar to save the form.

Old method

Buying in a new book used to be a two-step process which consisted of creating a bill using the Receive Inventory task and then paying that bill using the Write Checks task. That old procedure can be found here. The old procedure made sense at the time, but at some point a new feature introduced into Peachtree made it possible to use the simpler method described above.

¹ For Boskone books, only the officially announced number of books are saleable; for other books, all copies of the book are saleable, including the printing overrun.