The Ten Most Costly Royalty Reporting Issues

Intellectual property licensees of all sizes often have insufficient staff and systems in place to effectively manage royalty reporting. In fact, studies show that 81% of all licensees under report royalties, and that 40% of licensees underpay by at least 50%. That is potentially $20,000 in lost royalty revenue for every $100,000 reported! Factor in the amount of wasted time your own limited staff spends searching, copying, pasting, calculating, converting, mailing, emailing, faxing, and phoning, and it is clear that inadequate royalty reporting is a costly burden.

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Royalty Reporting Issue The RoyaltyZone Solution
1 License agreement compliance terms are misinterpreted. Clearly summarize and define compliance terms and easily share with all internal staff, partners, and licensees.
2 Royalty reports are late or not submitted. Publish due dates, send automated reminders, monitor submission status, and assess late fees.
3 Royalty reports are incomplete: required data is not provided. Reports are created and submitted online. All data for required fields (licensor defined) must be reported. Sales data can be imported from licensee's accounting software.
4 Royalty reports are indecipherable: licensee uses their own terminology or report format. Reports are always formatted properly, licensees can map their terminology to the licensors. (e.g., Web Sales = Retail: Online)
5 Royalty reports are incorrect: bad spreadsheet formulas, improper royalty rates, copy & paste issues, and/or math errors. All calculations are automated and always correct. The appropriate royalty rate is applied for each sales transaction.
6 Complex royalty rates (tiered rates, bundled products, minimum royalty units, etc.) are not accurately tracked or applied properly. Escalating rates are automatically adjusted whenever a threshold is reached. Formulas for complex rates are automated and correct.
7 Excessive or disallowed deductions are taken from gross sales or royalties owed. Only allowable deductions can be entered. Amounts exceeding defined limits are prohibited.
8 Licensed products are not completely or accurately identified. View all licensed product data, including images. New products must be submitted online for approval prior to sale (when integrated with CTI ProofTrak). Obtain exception reports if royalty reports contain unapproved SKUs.
9 Advance and Guarantee balances are not accurately tracked and applied. Advance and Guarantee prior balance, amount applied, and remaining balance are calculated and displayed on every applicable royalty report.
10 Foreign currencies are converted using the wrong exchange rate and/or conversion date. Currency conversion is always calculated with the correct exchange rate and conversion date. Original and converted amounts are displayed.

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