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Midem Royalty Survival Guide
Top Five Tips to Handling Modern Day Royalties
Royalty runs can be extremely stressful and time consuming. Delivering bad and late royalties sends a poor message to artists & clients. As music has evolved, accountancy has had to keep up with the pace. Small details are important when processing royalties, and ignoring details in the production of royalties can lead to many problems. The following five tips, should hopefully pose some helpful insight when processing the next royalty run.
Excel is brilliant and serves as a quick to use solution. Digital royalties have changed the landscape here - the volume of data alone can render excel inadequate. Complicated physical deals are very difficult to create in excel, as 3 or 4 royalty calculations could be performed on each sales line. There are plenty of good royalty systems available – the biggest tip here is that these systems are not regulated like normal accounting software is, so choose the software wisely.
It is vital that all costs are being captured in the royalty statements. Firstly, understand the deal types you have and what costs are recoupable in each one. Secondly, capture all costs being incurred, as many costs are very easy to overlook. The most common example of this are third party fees such as aggregation & distribution fees. Although they are a necessary evil, some of these fees are often not recouped, but can add up to a lot of money.
Even with the best systems in the world, throwing poor data in will result in poor data out. Understanding the data being processed will dramatically reduce the pain when running final statements. Internal knowledge from other departments, especially digital, could radically improve the quality output.
The biggest tip here is to ensure there is tight control on the income being processed in a royalty period. Common mistakes found here are statements being processed twice, statements being processed in an incorrect currency & statements not being captured in full, usually due to manual accountancy procedures. This could lead to literally giving money away.
DIGITAL DATA HANDLING:
Old fashioned accountancy will struggle to survive without the aid of other technology or systems. The impact of streaming is huge, not just financially but in terms of the data size – the growth in this area doesn’t show of abating. To perform any analytical work or to incorporate new income streams on such a data set is almost impossible until the real issue of processing the data is tackled. Crunching down and controlling this data is key.