Advance and Guarantee Management

A Guarantee is the minimum Royalty Payment that a Licensee is contractually obligated to pay a Licensor over the term of the agreement. Guarantees may be paid one time, quarterly, semi-annually or annually (custom payment schedules can be created), are nonrefundable and can be credited against future Earned Royalties in the form of an Advance.

RoyaltyZone provides an easy way to enter, monitor, and enforce advances and guarantees. In this tutorial, we will show you how to enter a minimum Guarantee (or Advance), effective over the agreement lifetime, with multiple payment milestones.

1. Click "New Guarantee" on "Step 8 – Advances / Guarantees" of the new agreement entry process

2. Enter a name for the term (Examples = Minimum Guarantee, Advance, etc.)

3. Use the default settings Start Date and End Date (defaults to the agreement start/end date)

4. Use the default setting to allow the licensee to recoup guarantee payments against earned royalties, then click "Create"

5. In this example, we’ll create a $50,000 guarantee with a $10,000 advance and two annual payments of $20,000 each. We’ll enter each payment milestone individually. For the first payment, select the payment due date (use the agreement start date if due on signature)

6. Enter the full amount of initial payment – in this case, $10,000

7. Enter descriptive text to help explain the payment to the licensee. The description will appear on the invoice.

8. Click "Create" to save the payment milestone

9. Next, we’ll enter the $20,000 payment for year 2, due on 10/01/12

10. Enter the last payment of $20,000, due on 10/01/13

11. Make sure the Due Date, Amount, and Description are correct. Use the "Delete" action to remove any incorrect milestones, then add a new (corrected) milestone to replace it. The "Total Guarantee" should match the total guarantee for the term you are entering in the license agreement.

12. When done entering payment milestones, click "Next" to continue

13. Associate the appropriate rights, then click "Save" (Associations are used to determine when a particular term is applied to a sales transaction)

14. Success! Use the Actions icons to edit, delete, or clone the Advance

1. Triangle: show/hide the rights associated to the term
2. Pencil/Edit: change the name, dates, or recoupabilty
3. Lego/Edit: change the associations
4. Calendar/Edit: edit, add, or remove payment milestones
5. Delete: remove the term
6. Clone: make a carbon copy of the term for easy entry of multiple terms

How do I enter a minimum Guarantee, effective over the agreement lifetime, with multiple payment milestones?