Millions Lost through Poor Royalty Management
Royalty management is one of the biggest and most complex challenges for intellectual property licensors. Many of them continue to rely on outdated systems no longer suitable for the ever-evolving royalty models of today’s time.
Others also strain and stress over the information and details entered into spreadsheets and databases. These methods, given the complex nature of royalty-related financial activities, can make way for hundreds, even millions of dollars in losses.
This then raises the utmost importance and great value of accounting for royalties.
Poor royalty management and the major losses it deals
In terms of inbound royalty, more than a billion dollars are lost annually due to poorly managed licensing royalty accounts, according to the Licensing Industry Merchandisers’ Association (LIMA).
On the outbound royalty side, numerous companies spend millions every year just for generating, printing, and distributing statements to payees, including writers, authors, and content owners among many others.
Because the cost and the risks are too high, more and more businesses have now transitioned to the use of innovative technology for their royalty accounting needs.
The use of powerful management platforms
With a powerful royalty management platform, businesses can conduct their royalty activities, including tracking, monitoring, and processing more efficiently and accurately. For instance, they can link specific royalties to their corresponding property or contractual rights data.
Furthermore, such platforms also give them the ability to choose rights attributes to assign rates with. This feature then gives them the power to better and more accurately manage complex structures.
Proper accounting: Always a key to remaining competitive
Royalties and all the payments that flow in and out of the activities related to it require precision and accuracy. The price tag of the failure to do so is too high and can mean hundreds of thousands, even millions of dollars lost.
For this reason, businesses should already take prompt action and consider investing in extensive and feature-rich royalty management software.
Accounting for royalties has gone a long way in terms of automation and ease of operations. This way, businesses can remain strong and highly competitive in such an industry that can easily lose billions.