Adjustment DA - Overpayment or Underpayment of Royalty

Adjustment DAs are used to correct production on a DA that was entered in a prior month. If the DA is in the current month, you will just correct/update the original DA. An adjustment DA is like doing a journal entry where when you take the initial DA and the adjustment DA and add the numbers together, you should end up with the final distribution of commissions.

Note: If an agent has transferred and overpaid between 2 market centers then the active market center will give the full refund. The royalty adjustment request must come from the active market center KLRW email to MCASupport@kw.com Instructions below.

Adjustment DA to Refund Overpayment of Royalty

1. Create New DA
2. Enter the first day of the current month for both the Closing Date and the Contract Date
3. Click the Adjustment Type button and choose Regular
4. Tab to the “Change to DA #” field and enter the original DA number
5. Tab and enter “refund of royalty” in front of the street name  
6. Click Save/Part 2
7. Enter Zero for the price, Listing %, Sales %, and Units
8. Change the “Check For” field to 1   
9. Click on the Associates on this DA button and add the associate to the DA
10. For Type, enter S for Sale
11. For Class, enter P for Property
12. For Agency, enter B for Buyer
13. Tab through to the Associate Split % field and enter 100
14. Zero out any E&O insurance that populates
15. Enter the amount of royalty owed to the associate as a negative number. In my example, the agent is getting refunded for overpaying their royalty cap by $100
16. Continue to tab through and zero out any deductions or donations that automatically populate
17. Associate check amount should be a positive amount showing the amount of the overpayment
18. Click OK                               
19. On page 2 of the DA, enter Zero for the Check # and tab to the check amount field. Enter zero for the check amount.
20. Note: if you are refunding company dollar, enter 0 for check number and 0 for amount.
21. Click in the reconcile box to let it populate the amount           
22. Post the DA and save it.
23. You may get a popup message that says Error DA_VERIFY. This is checking that you truly want to force royalty in the transaction. Because you are refunding royalty, click Yes.          
24. Print the deposit slip in WinMORE and import it into AccountEdge
25. Go to Banking > Spend Money > and write the associate a check using the 5-0060 (Clearing Commissions) account number from the cash account that you normally write your commission checks from

*Please Note: It is important to run an anniversary DA list for Royalty for this associate now that you have refunded their royalty over payment. If you believe a royalty adjustment is needed from KWRI, please see this article.

Adjustment DA to Collect Underpayment of Royalty

1. Create New DA
2. Enter the first day of the current month for both the Closing Date and the Contract Date
3. Click the Adjustment Type button and choose Regular
4. Tab to the “Change to DA #” field and enter the original DA number
5. Tab and enter “collection of royalty” in front of the street name 
6. Click Save/Part 2
7. Enter Zero for the price, Listing %, Sales %, and Units
8. Change the “Check For” field to 1   
9. Click on the Associates on this DA button and add the associate to the DA
10. For Type, enter S for Sale
11. For Class, enter P for Property
12. For Agency, enter B for Buyer
13. Tab through to the Associate Split % field and enter 100
14. Zero out any E&O insurance that populates
15. Enter the amount of royalty owed from the associate as a positive number; this figure should match the amount in the TOT column as displayed in the Royalty Anniversary Report. 
16. Continue to tab through and zero out any deductions or donations that automatically populate
17. Associate check amount should be a negative amount showing the amount of the collection
18. Click OK                               
19. On page 2 of the DA, enter Zero for the Check # and tab to the check amount field. Enter zero for the check amount.
20. Note: if you are refunding company dollar, enter 0 for check number and 0 for amount.
21. Click in the reconcile box to let it populate the amount (positive if you are collecting funds from the associate for royalty         
22. Post the DA and save it.
23. You may get a popup message that says Error DA_VERIFY. This is checking that you truly want to force royalty in the transaction. Because you are collecting royalty, click Yes.         
24. Print the deposit slip in WinMORE and import it into AccountEdge
25. Go to Banking > Receive Money > and book the associate a check using the 5-0060 (Clearing Commissions) account number from the cash account that you normally write your commission checks from

NOTE: if you are not receiving the funds immediately, create a Sales Invoice for the associate, select Layout in the invoice options at the bottom of the screen, and enter 50060 as the account to book the amount to be received from the associate. This will balance your clearing commission AND remind you to collect the funds from the associate no later than the next monthly invoice cycle.

Lonewolf Entry

For those using Lonewolf, make the following entry in addition to your WinMORE entry.

1. Un-Finalize trade (Dated in the transmittal month)
2. Change royalty to 0
3. Finalize trade
4. Print 2.P.1.2. Agent commission column should show balance
5. 5.2.
6. Enter zzz999
7. Click MISC Payment 3 tab
8. Click on Add
9. 1050 (commission trust account)
10. Invoice # (trade), amount (see example)
11. Screen will prompt for trade number (see example)
12. Cut cheque to move money back (General Chq) payable to Keller Williams Advantage Realty
13. 8.2 and EFT Money to associate (ensure amount matches 2p12 report.
14. Run 2P12 to see if money cleared.

Pay careful attention to the Royalty Exception effects of completing adjustment DAs. Run your Royalty Exception Report following each Adjustment DA posted and follow the instructions in How to Request a Franchise Royalty Adjustment to address an imbalance between your royalty accounts on your Income Statement well before transmittal.