Adopting best practices is beneficial to businesses in just about every industry – but when you’re dealing with royalties, it’s essential.
If you draw at all on licensing agreements and Intellectual Property, you need to pay close attention to the way you manage your royalties, and everything associated with them. Exemplary accounting is needed to ensure the accuracy of payments and maintain strong relationships with partners and clients. The risk of the alternatives – errors in payments, a negative impact on the bottom line and broken trust – means it’s crucial to understand what best practice looks like.
The good news is that it is relatively easy to avoid the pitfalls. These three tried-and-trusted techniques will help you streamline processes, avoid mistakes and safeguard business relationships.
Developing good royalty management practice can be time consuming, but thorough planning will always pay off. Keeping track of deliverables like royalty statements and deadlines is important. You also need to stay on top of key inputs like product codes, revenue data and contracts, to avoid a backlog or, worse, a missed payment. Understanding how long it takes to acquire inputs, and keeping lines of communication with input sources open, will help ensure schedules are met.
During the planning phase, look for opportunities to optimize your royalty management. Can sales be aggregated to simplify calculations? Is there a way to decrease the number of input sources to reduce errors? Centralizing information and eliminating multiple clunky spreadsheets makes life much easier. Some processes may be manual, but most will benefit from some degree of automation. Removing at least part of the human element from calculations means less room for error and means human resources can be deployed elsewhere. With MetaComet’s automation solutions, you can cut the level of effort required for the process by as much as 90%.
3. Choose the right system
Beyond a certain contract threshold, manual management of royalties becomes prohibitively time-consuming and risky. At this point, a royalty management system will do wonders for your productivity, bottom line and client relationships.
There are many factors to consider when choosing the right solution. Is the program easy to use, and how much complexity can it remove? Can it integrate with any other software in your organization? Will you be able to trust the team behind it? Working with a company with limited experience, or that is unfamiliar with your industry, could be a recipe for disaster, so request and check references. Define your specific needs, review all options and select the one that meets them best.
Managing royalties can be a hassle, and it’s a danger to your business if done badly. Following best practice and introducing as much automation as possible will make the most of your time, money and people. Contact us to learn how we can help you meet your goals.