At MetaComet Systems, we know that investment in a royalty automation and management system can repay itself many times over. However, we are also aware that measuring the returns on that investment can be challenging.

This was a subject that our President David Marlin discussed in an episode of the UK Independent Publishers Guild’s Podcast. As he pointed out, it’s very easy to underestimate ROI, because publishers frequently downplay both their time and their risk. To take one example from our experience: a small, entrepreneurial team had a really interesting publishing operation that was growing at a good pace, but one person was spending an inordinate amount of time on royalty management.

Most business theorists would agree that an entrepreneur like this should be focused on growing his business, and not spending tens of hours a month on laborious tasks like royalty calculations. He chose instead to save money, but committing investment at this point could have quickly paid off by freeing him up to do what he’s best at.

It’s likewise common to underestimate the risk of manual royalty management. We know that nearly all people who handle calculations through Excel spreadsheets for more than 10 to 15 books are making at least some errors. “In virtually every single case in my 20+ years of doing this, there are mistakes being made,” David Marlin told the IPG’s Podcast.

In any business decision relating to finance, leaders need to factor in not just the cost of doing something, but the risk of not doing it. Without automated royalty management, could you be over-paying your authors and wasting money? Might you be under-paying them, and in danger of legal ramifications? Are you compromising the reputation of your business that you’ve worked so hard to create? Could you be holding back the growth of your business? These are all risks that need to be incorporated into conversations about investment.

To properly assess ROI, business leaders need to accurately measure how many hours they or their team are devoting to royalty management tasks. “Often they’re not tracking how much time they’re spending doing it and worrying about it… it’s easy to think that you’re not spending as much time as you actually are,” said David Marlin.

And it’s not just the time spent buried in spreadsheets: it’s the time spent worrying about the accuracy of royalty calculations, or answering queries from authors and agents. You don’t want to waste mental energy on royalties, because it’s far more important to be thinking strategically about ways to make your business better.

In our experience, publishers with more than a handful of books will find that the resources they save and the risks they avoid will comfortably outweigh the cost of a system. Contact us to learn more about the benefits of our solutions, or schedule a free demo.

For a big picture look at the royalty management process, see our article: Royalty Calculation with the Royalty Management Lifecycle™