Royalty Management in Brand Licensing
Accurate and timely royalty management is an indispensable part of the licensing process for both licensors and licensees. Despite the essential nature of the position, we’ve found that royalty managers often lack the tools to help them do their work faster and more accurately.
Brand licensing software can automate tedious tasks, audit contracts quickly, collaborate more effectively with your vendors, and much more. By aggregating time-consuming tasks such as calculating royalty payments and creating financial reports into a single system, you free up time to focus on the creative side of licensing! For accountants: less time juggling between spreadsheets, accounting software, and a CRM means your royalty statements take minutes to validate, rather than days of crosschecking data.
A quality licensing solution consolidates all the royalty details of your agreements, from contact information to recoupment balances, into one location that’s simple to navigate. Most importantly, all those small royalty statements aren’t just a few cells of a spreadsheet, they’re aggregated neatly into the larger royalty set.
5 ways a licensing suite improves royalty management
Below are five ways brand licensing software can help you streamline your royalty management process to improve accuracy and productivity.
1. View all your data in a single place
Do you like duplicating your work across multiple software systems? We’ve heard a resounding “no” to that question from many royalty managers & accountants. Entering dozens of rows of data into hundreds of spreadsheets and then duplicating that in Quickbooks or another reporting platform is time consuming. It also creates too many opportunities for human error.
A licensing suite allows you to record your royalty data once and then pull all the reports you need from one location. When you aren’t bouncing between different programs, you free up time for more important tasks, improve the accuracy of your data, and reduce unnecessary stress.
2. Catch errors quickly and early
Your royalty report has to consolidate an enormous amount of data from multiple vendors. Receiving sales reports by email and then entering them into a spreadsheet makes it difficult to spot errors such as incorrect exchange rates, misreported sales, and erroneous royalty amounts. It also means you can’t easily track when documents were submitted or find those files later.
We spoke to bCreative co-founder Scott Gardiner about the difficulty of managing royalty reports for the many different artists they represent. "We can't just assume we're getting the correct royalties from our licensees,” he said. “We have to accurately report those back out to the appropriate artist and creative people. Our reputation depends on it."
The firm consistently struggled with reporting until they adopted a licensing suite. To highlight the difference it’s made to bCreative, Scott shared a recent example where he needed to generate a list of licensees for a specific brand.
"Within minutes, I had the report in hand and made some critical decisions based on the information in the report. On one screen, I could see when the license terms were over for that brand and how much we had earned in royalties...In the past, it would have been a lengthy and burdensome process to come up with those dates and numbers."
Licensing is a complex and fast-paced business. There’s too much at stake to rely on time-consuming and potentially inaccurate royalty reports. A professional licensing suite can pull sales data into a report instantly and identify any errors that need to be resolved. It’s a must for any licensing business that values speed, accuracy, and professionalism.
3. Spot trends quickly with visual data
The adage, “A picture is worth a thousand words,” is especially true when it comes to financial data. Royalty managers need to identify trends quickly and understand the overall status of partnerships. Trying to accomplish this when all of your data exists in a spreadsheet or across multiple software systems is a frustrating and time-consuming task.
A licensing suite that provides visual analytics takes the hassle out of reviewing royalty information. You can generate charts and progress bars based on royalty reports, so you can see everything you need to know at a glance.
Visual data is also how you spot trends. Are you seeing unit prices drop compared to previous reports? That could be a sign of retail moving your licensed products to the discount bin (i.e., the danger zone). Or is a new region or demographic trending up? This gives you an opportunity to double down on success by creating more suitable assets.
But, most crucially, visual information makes it easier to see whether you are tracking towards your target number and where there are bottlenecks limiting growth. For example, is your response rate of product approvals too long for a key partner? The faster you can identify issues, the quicker you can resolve them.
4. Improve licensing partnerships
Royalty agreements are notoriously complex. Typically, issues arise from either party interpreting the terms differently. Licensees and licensors must have a mutual understanding about how to calculate royalty percentages, which deductions are allowable, and when payments are due. When royalty payments are late or inaccurate, it creates tension that can potentially end partnerships.
We understand how valuable your licensing relationships are. You don’t want to lose partnerships over misunderstandings and noncompliance issues. Maintain positive working relationships with your licensees or licensors with brand licensing software. It makes it easier for them to navigate agreements and keeps lines of communication open if questions or problems arise.
5. Access your work from anywhere
Work used to take place exclusively in the office, but today’s technology has untethered us from our desks. With the ability to work from anywhere at any time, it’s essential to have remote access to all your data in real-time.
Licensing tools make this simple with automatic updates and syncing. You can log into the system from anywhere and know you’re looking at the most up-to-date information about your partner accounts. Whether at your home office or waiting in line for coffee, you can review reports, share information with your team, and make data-backed decisions with confidence.
Find licensing software that works for you
Royalty management involves so many moving parts and so much data that, without the right system in place, it’s easy to get lost in a sea of information. Licensing software ensures this doesn’t happen by providing diverse tools to manage every aspect of royalties.
To find the perfect solution for you, take note of the benefits listed above and identify which are most important for your royalty management team. Understanding the needs and priorities of your team will help you evaluate licensing suite providers to find the one that offers everything you need.