A single figure on the remittance
The payment arrives in the bank with a statement attached: gross sales, less returns, less the distribution fee, less carriage and storage and a few other charges with codes you only half recognise. The finance person posts it to the accounts as one line, 'distributor receipt', because breaking it down would take all afternoon.
At the end of the year, the accountant asks what storage cost the business, and nobody knows without going through twelve statements. Nobody has ever checked whether the fee percentage charged matches the agreement, or whether the carriage lines are for your orders at all.
Why the statement goes unchecked
The statement is built for the distributor's accounting, not yours. It nets many things together and the detail sits in a separate report, if you download it.
- Fees are charged as percentages of different bases (invoiced value, net receipts), depending on the agreement.
- Returns in the month relate to sales from earlier months.
- Service charges have codes rather than descriptions.
- The detail report and the summary do not always arrive together.
- Posting everything as one figure hides the cost of distribution in your accounts.
What going unchecked means
| Unchecked item | Why it matters |
|---|---|
| Fee percentage | A wrong rate compounds every month |
| Storage charges | Slow backlist quietly costs more than it earns |
| Carriage and small order charges | Some accounts cost more to serve than they bring in |
| Returns | Net income overstated in good months |
| Single-line posting | Your accounts show sales but not the cost of distribution |
Whether a charge is correct under your agreement is for you and the distributor to settle. The reconciliation shows you where to ask.
Our method for the reconciliation
- Import of the monthly statement and the detail report, in the formats your distributor provides.
- Your agreement's fee rates and charge types entered once, from the agreement, by you.
- Recalculation of the main fees from the detail, and a list of any line that does not match your entered rates.
- Charges grouped into categories you choose (distribution fee, carriage, storage, other) with the codes mapped once.
- A journal posted to Xero or QuickBooks through its API, splitting the receipt into sales, returns and each cost category, for finance to review.
- Monthly and yearly views of distribution costs, by title where the data allows, including storage on slow stock.
Month end with the reconciliation in place
When the statement arrives, the reconciliation runs and the finance person sees a short summary: receipts match, fee calculated at the expected rate, two service charges with codes not seen before. They look into the two lines, ask the distributor about one, and approve the journal. The accounts now show what distribution costs you each month.
At a title level, you can see which slow-moving backlist is costing more in storage than it earns, and decide with the publisher whether to pulp, remainder or move it to print on demand. Those are publishing decisions, and now they come with figures.
When the distribution agreement comes up for review, you have a year of detail to talk about rather than a feeling.
Take a month with a large returns credit from a chain. On a single-line posting, it just looks like a bad month. In the reconciliation, the returns sit on their own line, matched to the titles they relate to, and the fee on the sales side is checked separately from the credit on the returns side. Finance can explain the month to the publisher in two sentences, and the royalty run later uses the same returns figures, so the two never disagree.
Checklist: is your distributor statement a black box?
- The distributor receipt is posted as one figure.
- Nobody has checked the fee rate against the agreement recently.
- You do not know what storage costs per year.
- Service charge codes are unfamiliar and unchallenged.
- Returns make monthly income unpredictable and hard to explain.