Chances are you wouldn’t knowingly undermine your company’s bottom line by adhering to procedures that are financially risky. Yet many licensors of intellectual and physical property commit this foul every day … by relying on ineffective collections and royalty accounting practices.
Rights management can represent a substantial portion, or even all of a company’s revenue. However, the process is typically managed with a clunky, hodge-podge set of tools, such as internal databases, Excel spreadsheets, and homegrown software. These inefficient and often faulty tools not only impede a business from a time and cost perspective; they also open it up to a whole host of risks, such as:
- Copyright compliance. Failure to comply with copyrights can significantly impact a company’s relationship with its authors, artists, and licensors. If they don’t get what they’re due, bad blood and mistrust inevitably ensue. Licensors may also become apprehensive if a company lacks control and professionalism and reconsider future business deals.
- Revenue reduction. Without the proper collections and royalty accounting practices, there’s no way of knowing if licensees are reporting and making payments. Companies also need to proactively and regularly manage expiring contracts and agreements. Waiting until they expire could jeopardize easy revenue.
- Errors. Everyone makes mistakes, especially when there’s a large quantity of legal agreements and contracts to manage. Royalty accounting can get tricky amidst the myriad reporting requirements and payment rates, tracking balances from period to period, and offsetting advances. Underpaying can put a company’s reputation on the line and endanger its adherence to contracts. Overpayment also puts a company’s good name at risk and impacts its margins.
Incurring one or all of these risks could be tantamount to disaster. Fortunately, they are all completely avoidable with a modest investment in effective rights management software. Specifically, MetaComet’s Royalty Tracker can make a world of difference in a company’s ability to maximize collections and solidify royalty accounting on licensed content. The benefits of a Royalty Tracker license typically offset the cost and provide a significant ROI. Some of these advantages include:
- Increased licensing revenue.
- Rapid implementation.
- An immediate and lasting improvement in efficiency.
- Centralized data storage.
- Powerful reports to better understand your business.
- Tightly integrated rights management features that enable the sharing of information, such as contracts, and shared payment and reporting responsibilities.
As intellectual and physical property-reliant industries continue to grow and evolve, so does the need for software that fosters effective collections and royalty accounting practices. Licensors who don’t adopt these practices are leaving money on the table and exposing their businesses to higher risks of failure.