Generating royalty statements through Consonance is a multi-step process.
- Specify royalty rates in a contract
- Load sales data
- Create a royalty run, for calculating the royalties due on sales.
- Create a statement batch, in which the amounts owed to contract payees are calculated.
Factors affecting royalties
Consonance’s royalty and statement engines consider the following factors in determining royalties payable.
- The quantity and value of sales for each sales channel.
- A base royalty percentage.
- Variations to that percentage, based on the date of the sale, the price of the sale, and the cumulative sale quantity.
- Agreed advances, and whether they have actually been paid.
- The number of months since publication.
- The date for which the statement is generated in relation to the publication date.
- Any reserve against returns.
How Consonance produces royalties and statements
The major elements are
- Store the specification for the royalty calculation
- Store the sales data
In addition, when calculating the amount to be paid to a contributor, the following other factors must be considered.
- Reserve against returns
- Advance payments
- Prior royalty payments
Royalty runs are groups of products that are to be run through a royalty calculation cycle. Start by defining a new royalty run, supplying the name of the run and optionally a last sales invoice date to consider. Edit the batch to add products to it. The analysis step, which can be skipped, provides information on the current data supporting each royalty calculation – the number of sales, the number of ‘unroyaltied’ sales, the presence of royalty base rates for the edition, etc. The results of the royalty calculation can be reviewed before the run is approved.
Statement batches are groups of contacts for which financial statements are to be generated. When creating a new batch the name must be unique, so it’s generally best to be methodical about your naming convention. The date that you supply is fixed once the batch is created, but if you get it wrong, delete the batch and create a new one. When the batch has been created, edit it to add contacts and start the statement generation process. The results of the statement generation can be reviewed before the batch is approved.
Royalties and rights
To include rights sales in royalty statements, incomes and payments must be entered as a sales and payment items, separately to adding the details in the rights section.