How it works
Consonance breaks down royalty processing into two steps, calculating:
- the total royalty due per product across all contributors within the royalty runs section. Data is gathered from the contract’s royalty specifiers and sales information.
- the split between those contributors within the royalty statements section. Data is gathered from the royalty run and the contract’s payee split information.
To begin royalty processing, the system must already know:
- works and products
- sales channels and masterchannels configuration
- company statement months in the Company > Company settings section
- client default currency, as all financials are handled in your default currency
Run royalties as a publisher with legacy data
Running royalties for the first time with Consonance requires careful planning, because the system must account for past payments to ensure future accuracy, particularly with regard to advances and escalators.
Please read through the workflow below and consider the data you have accessible to determine your initial royalties strategy. Some paid for consultancy hours will be required to review the data and strategy. Typically, this is around 10 hours, depending on your level of complexity.
Import product rates and payee splits, including historical payments
We provide a set of spreadsheet templates to import your royalty contract data.
The first three sheets in that set of templates set the total payable royalty rates across all payees, at the appropriate level, including escalators. This is when your masterchannel and channel set up comes under pressure.
The fourth sheet is for payee splits, which should include your past payment data. Note that you may need to include non-contributor payees in these sheets that cannot be pre-filled into the template.
Your template will be pre-filled with your existing product and contributor information, but you can download an empty template to get a sense of the data required.
There are three ways to backfill your payments history:
- Detailing advances
- Lump past payments that are not advances
- Lump opening balance
Advances Use these columns to specify agreed advances and due dates, where available. If they have been paid, you must include a paid date. You should not include paid advances in the “Past payment total amount”/“Last paid date” columns, and you should not include advances detailed here in the “Opening balance” column. The system will know what is paid and unpaid based on the dates being present or not.
Lump past payments Use the “Past payment total amount”/“Last paid date” columns to detail any non-advance payments, such as rights payments that impact advances earning out. You should not include advances detailed in the advances columns in this column.
Opening balance If advance information is not available per work, per payee, use opening balance as a single starting point. This lump sum will be used to calculate where the earn-out status of the contract is. It should only include unpaid advances that are not detailed in the advances columns.
It is likely that advances and lump past payments columns would be used together, but it is unlikely that advances and lump past payement columns would be used together with opening balance.
Import sales data
- Either: Import historical sales working within your sales channel requirements. There is some flexibility here, particularly if you need to take unit escalators into account.
- Or: if you don’t have detailed historical sales for products at the sales channel level, you will need to rely on the payee opening balance as above, rather than importing any sales for periods prior to your first run in Consonance.
Test and run royalties:
- Where possible, run your royalties using your old method for the period, so you can compare the results with your first run in Consonance to ensure continuity.
- Once all royalty rates data is in the system, request a royalties template export to eyeball your data by raising a new support ticket.
- Calculate royalties in Consonance.
- Generate statements.
- Compare the numbers produced with your old method.
Known royalties gotchas, with development on the roadmap:
- The work-level royalty rate data entry interface is unnecessarily complex, and will soon be replaced.
- It can be hard to see why royalty calculations are not as expected. Soon, we will implement automated royalty checks, like the metadata checks, to point out common errors in royalty data.
- While the system neatly handles payees with different rates for different products, currently, Consonance cannot process different escalators with payee splits. If one payee on a product gets an escalator, and another doesn’t, the royalty statement phase for that product will need to be completed outside of the system.
- The template contract PDFs include payee splits for all parties on a work.
- Consonance does not have a sales value escalator. It only processes unit escalators, date escalators and discount escalators.
Raise a support ticket in the usual way for help with royalties.