Royalty Reporting ~ A Chore, or a Valuable Source of Information?
By: Gregory Carrier
For many publishers, whether seasoned or new, managing royalties can be tedious. It’s that chore that gets done at the very last minute. Obviously, getting titles on the market and raising awareness and interest in them is where the income is. But neglecting accurate accounting and reporting of royalties can get you into trouble.
Your authors are your lifeblood, and you need to keep them happy. Even if you may not need to pay royalties for a while longer, you should provide those participating in sales (authors, editors, illustrators, etc.) with timely periodic reports that clearly show the sales and progress toward royalties. Presenting this progress might even get them to help more in promoting your titles. Basically, put yourself in their shoes. What would you want to see and know about the royalties you hope to receive?
As a bare minimum you must provide your authors with a report that shows the amount they have earned for each title. Depending on your business model, you might need to provide more detailed information. You should include the balance owed or the amount they will need to earn before receiving payment. Remember, most authors will be focused on the amount of money that they will be receiving, so any information clarifying when and how much should be addressed.
Under potentially elective information, think about how you might involve your authors in sales and marketing. While adding additional data might be beneficial, also consider its practicality. Depending on the information available from your distributors, it may be helpful to show wholesale values. Or perhaps show sales trends in order to determine the impact of any particular marketing effort.
After you have crafted your royalty report format, your means of distributing these reports is next. Actually, this decision can affect the format, as printed paper can be more limiting than electronic layout. You know that converting from printing and mailing paper to sending bits and bytes can save both time and money, so if you have not made that switch yet, start now! You can always make exceptions for the few Luddites in your stable while saving on the bulk.
For electronic distribution, there are three main methods: direct email, shared Internet folders, and a web portal. Under any of these, before each instance of your royalty data becoming available, make sure you have a process to review the numbers before you commit them to your authors. While a completely live system, in which the authors can see data as you enter it into your system, might initially sound ideal, it would probably cause more trouble if there is no wall between entered data and approved results.
Direct email seems straightforward, but in these days of spam filtering, it might not be practical if you have more than a handful to send. Before committing to this route, be sure that your email host will allow you to send the volume you need.
Shared Internet folders can be a nice step up from direct email. Typically this would use a web service such as Box, DropBox, or Google Drive, in which you have a separately shared folder for each of your authors. You can include the reporting date in the filename to help with organization, and your folder settings generally include the web service automatically sending notification when a new report is added to a folder.
And finally, a web portal might be considered the ultimate these days. If you already have an author portal on your website where they can update their contact information, it might not be difficult to extend this to include a repository for their royalty reports or even a link to their shared Internet folder.
With any of the electronic distribution methods, formalize the process it takes to approve and publish the information so that you get consistently good results even when someone else is doing the work. Not only is your reputation at risk, but good communication with your authors is at the heart of your business. Everyone makes mistakes, so acknowledge that it is possible, and work on improvements with their help.
Royalty reporting is not just a necessary evil. Use it as an opportunity to better connect with your authors. In addition enlist their help in royalty report data and formatting so that you can both benefit.
Gregory co-founded ARGUS Financial Software, now ARGUS Software, the premier provider of real estate financial analysis systems. The software suite was the industry standard for budgeting, development budgeting and valuation of real property. Seeing a need for his abilities to help with complex analysis, Gregory then co-founded Financial Softworks, LLC, and partnered in the development of DashBooks Royalty Pro in 2006. The goal was to make the complexity of royalty management easier for the smallest of publishers yet powerful enough for clients handling thousands of titles.
You can find Gregory’s company, Dashbooks, at the following links: