Publishing is a deceptively complex business, requiring the ability to track book production, royalties, returns, multiple warehouses, multiple sales channels, etc. With so many time-consuming administrative tasks, the day-to-day business of publishing can become an exercise in data management, rather than an endeavor to find the most marketable books and put them into print.
Even with all of the advantages technology can offer to a publisher, it remains under-utilized; one reason is that evaluating and choosing the right royalty accounting software solution can be daunting. While the rights and royalty accounting software industry is relatively small, it is still important to carefully consider which solution will best fit your company’s needs. This article, Choosing the Right Royalty Accounting Software System for you Company – Part One, is a look at the first steps in considering what solution will be a good fit for your company. It is a precursor to more in-depth looks at the specific and technical considerations should go into your choice.
Laying the Groundwork
Among the first steps in choosing a solution is vetting the provider’s capabilities by viewing a demo. In a best case, your provider can perform the demo with one of your sample contracts. Pay careful attention to what features are available out of the box, and what features you may need to have customized.
The next step in vetting royalty accounting software providers is to talk to the references they provide. Generally you should try to speak to companies that are in a similar sector to your own, are of a similar size, or have similarities in the way they use their royalty accounting software.
When talking to references who use the royalty accounting software you are considering, find out what they don’t like about the system, as well as what they do. Often you’ll often hear a lot of good things about it, but make sure you ask them what they don’t like about the system. These things may be inconsequential to them, but they may be characteristics that raise issues for you.
Once this is done, investigate whether a Proof-of-Concept is available. This is an important to see how the program works; a number of programs may have the same features, but how they go about them can be quite different – and this can affect how easily the program integrates with your business. It also proves out the solutions abilities to meet your needs. The better companies may charge for a Proof-of-Concept, and it is probably worth it.
Framework for Conducting your Evaluation:
After you’ve done your legwork vetting various royalty accounting software manufacturers, it’s time to test out overall functionality. This can be divided into several sub-topics: Ease of Use, Flexibility, Access to Information, Support, and Integration.
Ease of Use:
If the software isn’t intuitive for the people who are going to be using it on a day-to-day basis, it will defeat the whole point – increasing efficiency and saving labor costs. Ease of use is important to consider when using a demo version of royalty tracking software. Take note of what your learning curve is, and of how easy it is to answer your own questions using provided documentation.
Accounting software makers can often customize their product to do basically anything you want, but keep in mind these tweaks can add significantly to the end cost. You can measure flexibility in many aspects of a system. When doing data entry, for example, are you required to start over if you make a mistake? Or, are you allowed to correct the mistake and continue. Does the program enable you to modify a record (such as an order) after it has been created? Or, are you required to delete and reenter it.
When searching for records, what criteria can you use to find them? Customer number vs. your invoice number? Order date vs. ship date? Can you search by ISBN and title? If you have any questions or concerns about flexibility, make sure to ask about them up front.
Access to Information:
Accessing your data can make your day-to-day business easier, but most importantly, it means that you can make better strategic decisions based on historical information. Having the data you need, when you need it, makes communicating with customers, vendors, marketing contacts, etc, faster and easier. Important data access considerations are:
Can you view historical data? For example, an author’s past royalties or advances may not be easily accessible in every royalty software program.
Are there time constraints on data access? If a program mandates a relatively quick close out period, data from that period may become harder to access. If there are close out periods, how easy is it to access data from them”
This is an area that requires some experimentation with the provided demo, or in-depth questioning of the software provider. Every royalty management software program will have a quiver of standardized report functions, and these may be represented as covering all potential reporting requirements of any client. What is important to determine is if all of your company’s reporting needs will be covered by the standard functionality, or whether customization or add-on modules will be required. Try to find requirements within your reporting that fall outside of the out-of-the-box reporting capabilities of the royalty software, and ask about them. Note how easy or difficult it is for you to customize reporting to your requirements. Thousands of data options don’t necessarily mean a royalty accounting software program will be robust for you, if you are getting bogged down in the details.
Next, consider the company itself. By this point you should have had a chance to talk to, or meet with, representatives of the royalty accounting software company, and to speak with some of their existing customers. Do you feel comfortable asking them about their product? Are you satisfied with the experiences related to you by other users? Keep in mind that your requirements of the royalty tracking software may be different in the future than they are today – ask about support when it’s time to upgrade, or integrate different technologies. Evaluate what your method and means of support from the software provider will be – for example, if the person at your company who will be working most closely with royalty accounting software may have to do work during the night, is phone support available?
Finally, after finding a solution provider that you feel comfortable with, whose royalty software program that fits your company’s needs, evaluate how intelligently their systems will integrate with your business. Again, this will be a major selling point for the software manufacturer, so don’t be afraid to ask questions. A good starting point is evaluating what royalty accounting functions the software will be able to automate. Consider a system with tight integration between the accounts payable and royalty accounting system, versus a system where you have to run one program for royalties and a different program for accounts payable and checking. The system with tight integration enables you to create and print the royalty checks automatically, right from the royalty accounting system. In doing so, the royalty files are updated with the payment information. In a system without tight integration, you would have to run a report listing the checks needed. It would then be necessary to go to the accounts payable program and manually enter them one by one, and, if you wanted the royalty accounting system to know about the payments, you would have to manually enter the check information back in.
This is the end of Part I. In Part II, I will highlight some of the more technical considerations in choosing the right royalty accounting software system, by looking at specific areas of functionality, in greater detail.