Royalty software calculates royalties and generate statements. It can speed up processing, generate accurate statements free of over or under payments and update your accounting software with royalties payable. It provides authors with statements that they can trust.
Your software selection will be guided by 1) your budget, 2) current and future royalty rules, and 3) desired benefits and 4) publisher references.
Budget
Royalty software ranges in price from $250 to over $100,000. In general, the more expensive software is more powerful, more scalable and offers better support.
The cost of royalty software may include;
- Software or (hosting) cost
- Implementation cost
- Computer hardware costs, if needed
- Modifications
- Technical support
Kensai International recommends that publishers look at the 1 year, 3 year and 5 year total cost of ownership when evaluating software solutions. A solution that costs more over 3 years may have a lower total cost of ownership over five years.
Example:
- Software Solution A: $25,000 plus $5,000 (20%) per year for maintenance and upgrades
- Hosted Solution B: $12,000 per year
Over 3 years the total cost of Solution A is $40,000. The total cost of solution B is $36,000. Solution B costs less.
Over 5 years the total cost of Solution A is $50,000. The total cost of solution B is $60,000. Solution A costs less.
Royalty Rules
What royalty rules do your contracts follow? What rules will you need to follow in the future? These two questions will guard the purchase of the your software. You need software that can handle all the rules used in your contracts.
If the software cannnot handle all your royalty rules, the workarounds you use to handle these “exceptions” will likely lead to over or underpayments as employees that know the workarounds move on or overlook them when processing royalties.
Desired Benefits
What functionality do you want from your software? Are you a small press that wants the software to export royalty payments owed to QuickBooks? Are you a large press that needs to generate 100,000 statements each royalty period. Do you want the software to store digital copies of your contracts? Do you want a solution that can manage rights sales?
References
Last, but not least is references. Do companies using the software like the software? Are they satisfied with the support they receive? At Kensai International we advise our clients not to purchase any software until they have talked to companies that actually use the software. Ideally, these references should be of comparable size to your company and publish similar types of books.