We have a Profit sharing program with the branch managers of our firm and I have a question about where to include those payments with regards to our P&L.
We currently provide payments quarterly based on branch performance, but then deduct those payments out of the branch payroll expenses for the following month (which is when the payment was made). What this does is effectively deduct the last quarters profit share out of the current quarters profits. Which doesn't seem quite right.
Can anyone provide any additional insight/arguments on how to manage profit share in our accounting books?