We all want automated royalties. Wouldn’t it be nice to just push a button and watch your statements and payments go out to authors without a hitch?
At MetaComet Systems, completely automated royalty accounting has long been our goal. Is this just a publishing fantasy? Maybe, but the vast majority of the process can be automated. Consider that publishers are already reducing their effort by as much as 90% with automation.
So, how to get there?
The first step towards full automation is modeling the overall process. Once you see the big picture and how all the pieces fit together, you can start to identify where automation is possible. To get you there, we developed the Royalty Management Lifecycle: a representation of every aspect of royalty management. You may recall the introduction to this model in your Royalty Automation Handbook.
To refresh your memory, royalty operations begin with the Acquisition phase (top left on the diagram). Once a book has made it to market, the next phase starts: Receive Sales Reports. You will use the sales data to perform the third phase: Calculate Royalties, and generate any necessary reports. Finally, at the end of the royalty period, you will Distribute Payments & Statements. Then the cycle repeats, with more contracts constantly added to the mix.
In this post, we will dive deeper into your options for automation in the area of acquisition.
To see how we can automate the acquisition phase, we need to drill down into the components of acquisition. The first thing a publisher needs to do is generate a contract document. Perhaps the easiest way to do this is to have a Microsoft Word template ready. A template (with a .dotx file extension) can form the basis for each new contract, generating standard Word documents with different authors, titles, and terms each time. The advantage of templates is that you won’t easily overwrite them. When you try to do the same thing by copying an existing Word document, on the other hand, you always run the risk of making permanent changes to your source document by accident.
Keep in mind that the more standardized your contracts, the easier automation will be. Many young publishers and some experienced ones like to negotiate unique deals with each author. While there may be business value or even necessity in this, it has the potential to create inefficiencies later in the Lifecycle. It’s fine to change details like royalty rates or available rights. Especially if you are not using a dedicated royalty management system, changing other terms can add complexity downstream, which creates inefficiency and a more manual process. For example, try to keep your minimum payment thresholds (the amount an author must earn before you cut them a check) and your payment terms (number of days after royalty period that payment is due) consistent across authors. The same goes for payment frequency. Consistent escalators will also save you effort.
Once you’ve created the contract document, you need to share it with your author. The basic options are to either use an online service (like AuthorPortal.com, Dropbox, or AdobeSign) or send it via email. The online services have the advantage of allowing communication and collaboration in a central repository. You will probably need to refer to some of these contracts and communications down the road. Consolidating your communication with the online options makes it much easier to find information than searching through a trail of emails.
The next step toward automating your acquisition process as much as possible is to record the contract details in a way that facilitates your royalty calculations. This is another place where templates are valuable. Like generating contract terms with Word templates, you can set up Excel templates that automatically replicate your terms. If you are using a dedicated tool like MetaComet’s Royalty Tracker® platform, you can almost certainly set up contract templates.
If you are managing royalties manually in Excel, it becomes even more important to standardize. Managing different rates and terms for each author will quickly become overwhelming, and errors are inevitable. Having only one or two templates will substantially reduce the effort required to manage royalties.
The final step in the acquisition phase is “onboarding” your authors: sharing your standard practices and manuscript guidelines, and recording critical biographic and bibliographic details. Here, a dedicated author portal can save you and your authors considerable time and effort. A good author portal will let you make all your important information available online, and simplify your life with online questionnaires that ask your authors standard questions and streamline the process of answering them.
Now that your author is signed and all the contract details are taken care of, you can go about the fun part of the business: getting the book to market and seeing the fruits of your labor in the form of inbound sales. Managing those inbound sales is the next phase of the Royalty Management Lifecycle. Stay tuned for our next post to find ways to reduce your effort by up to 90% there, too.
In the meantime, if you would like to learn more, visit www.MetaComet.com or reach out to us any time. We’re here to help!