Combined recoupment of royalties
Combined recoupment of royalties
The administrative challenge
Imagine this: You’ve just paid an advance to an author. Now you need to make sure that every penny is properly accounted for, before any royalties are distributed. But what happens when the author has several agreements with income and with losses (such as negative royalty balances) across several books or projects?
Being able to offset loss from one agreement against another from the same author ensures that you’re not paying royalties to the author on one agreement while carrying a negative balance on another.
Key benefits of combined recoupment of royalties
- You can deduct royalties from the prepaid amount (advances).
- Offset loss from one agreement against another.
What does combined recoupment of royalties mean?
In publishing, authors often have several agreements under a single contract. For example, several formats can be utilised under the same title. To simplify royalty management, you can combine the agreements and track how well they perform together. This is called combined recoupment, sometimes also referred to as cross-collateralisation.
When you combine agreements in this way, you can:
- Offset negative balances from one agreement with positive income against another.
- Keep an accurate overview of all income and expenses tied to a single author or project.
- Prevent premature or inaccurate royalty payments by ensuring that advances are recouped before any royalties are distributed.
By combining royalty agreements, you will ensure that payments are only made when the overall balance from all the related agreements is positive. This approach improves accuracy and reduces the administrative complexity.
Combining agreements: Two key concepts you should understand
This feature lets publishers combine several agreements for the same author or project and manage them as one. Instead of processing royalty payments individually, you can handle them as one unit, where all the income contributes to covering advances and other costs.
By combining and thus consolidating agreements, you get a clearer picture of the author’s overall financial status and avoid paying too much.
An advance or guarantee is a pre-agreed amount that is paid to the author across several agreements.
By combining these agreements, publishers can track when the guarantee has been met and only distribute royalties once all the related advances have been recouped.
Why this matters for your administration
- Improved financial accuracy: Ensures that advances are fully recouped before any royalties are paid, also when several agreements are involved.
- Streamlined operations: Reduces the administrative workload by simplifying the way you handle and track complex contracts.
- Reduced risk of overpayment: Consolidates financial data to prevent premature or inaccurate royalty payments.
- Financial clarity: Provides an overview of your financial situation across all combined agreements, making it easier to make well-informed decisions.
Take control of your royalty management
With Schilling’s royalty management solution, you can eliminate inaccuracies and avoid wasting time on complicated calculations. Combining agreements either to offset royalties or advances across agreements offers a streamlined and accurate way of handling royalties without spending any more time than necessary.
Are you ready to transform your royalty management process? Dive into our royalty management solution and explore all the features today.
