This article presents an outline best practices for ensuring accurate royalty calculations on sales activity. Best practices for accurate royalty calculations on licensing and permissions activity will be covered in Part 2.
Step 1. Review New Royalty Contracts
We recommend that the user print and review the Royalty contract summary report for new titles. This report can be printed from the Royalty contract view or the Royalty contract record. Confirm that there are no errors in the royalty rules.
Step 2. Verify Royalty Advance Balances
If your organizations pays royalty advances the royalty advance payments (debits) for the royalty period should match the advance payments in EasyRoyalties for the royalty period.
From your accounting software print a listing of payments for royalty advances (debits to the asset account royalty advances).
From EasyRoyalties go to the Royalty Payments view. Filter the view to show only records for advances & fees (1) paid (2) during the royalty period (3).
From the documents icon (the printer) in the toolbar select Print list for all items in this view.
If the EasyRoyalties total is lower this means that all advances were not entered into EasyRoyalties or that entered advances have an incorrect payment date. If the EasyRoyalties total is higher this could mean that payments records were inadvertently duplicated.
Step 3. Verify Sales Income
The first step is to verify that the sales income recorded in the royalty software matches the income in your accounting software. You can do this from the Sale analysis report or Sales summary report for the royalty period. Both reports are accessed from the Reporting menu. The sales analysis report shows sales and returns for the selected period. The sales summary report shows net sales by month for the period.
If sales are too high it is likely that sales for a period were imported twice. If sales are too low this means that not all sales for the royalty period were imported into EasyRoyalties or that sales were imported with an incorrect date.
Step 4. Generate Unresolved royalty activities report
After royalties are calculated generate an Unresolved royalty activities report for the royalty run. The is report shows sales activities not accounted for in a royalty rule. This report is accessed from the documents (printer icon) in the toolbar in the royalty run view, the royalty run record and the royalty statement record.
Example: If eBook sales not covered by a royalty rule this report will highlight this omission.
If there are any unresolved royalty activities, add the appropriated royalty rules to the specified royalty contract and recalculate royalties. Then generate the unresolved royalty activities report again. When there are no unresolved activaties proceed to the next step.
Step 5. Review Royalty Statements
The last step to review the royalty statements. Generate a printed copy or PDF of all statements in the royalty run. If you have thousands of royalty statements review the ones with the largest balances, statements for new titles and a sample of the remaining statements.
From a royalty run record you can print the royalty statements for that run. To do this select the Documents button; the printer icon, in the toolbar. In the Reporting & analysis window that appears select Royalty statement. Select the royalty statement format from the Use saved settings dropdown list at the bottom left corner of this window.