Why are my expenses being split? I need them recouped in full!

Fear not - as long as the income is also being split at the same % (the default in IC), your expenses will be recouped in full before any royalties are paid out. 

It's true that expenses get split via the net, such that a statement that only has expenses looks like this:

$0 income
-$100 expenses
= -$100 net
50% split
= -$50 payee share/balance

This where folks sometimes get confused- why is their balance -$50, when you've spent $100? 

The answer is that in Net Profit accounting, the income is also getting split, typically at the same %.

This means that an equivalent amount of income is required for any royalties to be owed to payees. For example, here's the same income amount added to the above -$50 payee balance:

$100 income
$0 expenses
= $100 net
50% split
= $50 payee share
-$50 previous balance
= $0 payee balance

To repeat: as long as income and expenses are being split at the same %, the catalog always recoups the expenses in full prior to any royalties being owed!

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