The following are best practice standards for the booking of productivity coach fees. To ensure proper tax records and royalty booking, there are only two possible methods to record productivity coach fees; either by inside referral or by deduction. The preferred method would be the use of inside referral. Inside referrals require no adjustments to 1099s at the end of the year. Should the deduction method be required (for instance, when an associate has capped and is not allowed to give an inside referral), adjustments to the 1099s will be required for the Productivity Coach receiving the fee. These are the recommended booking procedures:
Productivity Coach is paid contract labor 100 percent by the associate:
On the DA, the fee to the Productivity Coach would be booked as an inside referral to the Productivity Coach and deducted from the associate’s net proceeds from the transaction. The DA is processed using the same procedures as all other inside referrals, with the check to the Productivity Coach being coded to the clearing commissions account.
In the event that the associate is capped and cannot pay an inside referral, a deduction is set up in the name of the Market Center. The DA is processed using the same procedures as all other deductions. The Market Center will then cut the check to the Productivity Coach which will keep the 1099 income at the Market Center level, and the associate will not have to deal with issuing a 1099 to the Productivity Coach. This check is coded to the clearing commissions account.
The card used within AccountEdge to pay this fee shall be set up as a 1099 card so that the appropriate 1099 can be produced at year-end.
At the end of the year a printout (ad-hoc report) of deductions withheld from the associate’s commissions will be distributed to the associate so that they can take the deduction on their taxes if eligible
The Productivity Coach is paid contract labor and the Market Center pays a portion:
On the DA, only the portion of the fee that the associate pays to the Productivity Coach would be booked as an inside referral to the Productivity Coach and will be deducted from the associate’s net proceeds from the transaction. When entering the payment to the Productivity Coach, the portion paid by the associate is coded to the clearing commissions account, and the portion being paid by the Market Center is coded to “Expenses–Productivity Coach.”
In the event that the associate is capped and cannot pay an inside referral, a deduction is set up in the Market Center’s name. Only the portion of the fee paid by the associate will be deducted from the associate’s net proceeds from the transaction. The Market Center will then cut the check to the Productivity Coach, which will keep the 1099 income at the Market Center level and the associate will not have to deal with issuing a 1099 to the Productivity Coach. This check is coded to the clearing commissions account. When entering the payment to the Productivity Coach, the portion paid by the associate is coded to the clearing commissions account, and the portion being paid by the Market Center is coded to “Expenses–Productivity Coach.”
The card used within AccountEdge to pay this fee shall be set up as a 1099 card so that the appropriate 1099 can be produced at year-end; see Enter Vendor into AccountEdge. At the end of the year, a printout (ad-hoc report) of deductions withheld from the associate’s commissions will be distributed to the associate so that they can take the deduction on their taxes, if eligible.
The Productivity Coach is paid through payroll, and the Market Center collects a fee from the associate:
On the DA, the fee to the Productivity Coach paid by the associate would be booked as a deduction set up to the Market Center, and would be deducted from the associate’s net proceeds from the transaction. The deduction received from the associate is coded to “Other Income – Productivity Coaching Fees.” The Market Center then pays the Productivity Coach through payroll, with the salary of the Productivity Coach being booked to “Salaries–Productivity Coach” and any bonuses booked to “Salaries–Productivity Coach Bonuses.”
At the end of the year, a printout of deductions withheld from the associate’s commissions will be distributed to the associate so that they can take the deduction on their taxes, if eligible. The Productivity Coach will receive the standard W-2 at the end of the year.
The Productivity Coach is paid through payroll, and the Market Center collects no fee from the associate
As no deductions are collected, no entries on the DA are created. The Market Center then pays the Productivity Coach through payroll, with the salary of the Productivity Coach being booked to “Salaries–Productivity Coach” and bonuses booked to “Salaries–Productivity Coach Bonuses.”
Productivity Coaching Report
To assist the Market Center Productivity Coach, MCAs often print a monthly activity report. In order to print a Productivity Coaching specific activity report, you must first identify the agents in coaching within the WinMORE system. This is done by creating a “Coaching” deduction in WinMORE and assigning the deduction to each associate in the program through the associate entry screen - commission tab - deductions. Either the person entering DAs will be prompted each time they enter a DA to add the coaching deduction fee or they can search for associates that have a specific deduction listed in their associate profile within WinMORE.
Once you have identified each person in the program, you can run the following ad-hoc report which is similar to the standard monthly activity report.
Please keep in mind two things:
- This report shows the current month’s transaction volume, making it necessary to print this report immediately PRIOR to transmittal. Once you have transmitted, the monthly numbers are reset.
- The ad-hoc report attached pulls the specific deduction of “COACHING”. When the MCA sets up their deduction, he/she must either use “COACHING” or change the deduction name in the ad-hoc report.
Ad-Hoc Report String:
LIST AGENTS WITH STATUS = "A" AND WITH DEDUCTIONS = "COACHING" BY FISC_MO FISC_MO NAME_L TOTAL TOTGCI_YTD TOTAL YTD_CO_COMM TOTAL TOTVC_PERIOD TOTAL TOTVW_PERIOD TOTAL LSTUW_PERIOD TOTAL LSTVW_PERIOD TOTAL TOTVC_YTD TOTAL TOTVW_YTD TOTAL LSTUW_YTD TOTAL LSTVW_YTD
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