In this day and age it’s critical to be weary of who you sign licensing contracts with. There are many scammers out there looking for innocent victims who are all too eager to sign away the rights to market their song, book, product, idea etc. It’s crucial to make sure you understand all aspects of a licensing contract, specifically terms and clauses before signing. Whether you’re a novice or veteran when it comes to signing licensing agreements you should always get the facts first. If you’ve found yourself in a sticky situation when it comes to collecting royalties, then it’s time to call a royalty auditor and have them conduct a royalty audit. Many times royalty underreporting goes unnoticed, leaving licensors with little or nothing to show from their investments. Protect your intellectual property and make sure the company you’ve signed on with is following royalty compliances.
What is a royalty audit?
A royalty investigation is an audit to check that a licensee is paying the correct amount of royalties to the licensor. Auditors will go through contracts, records and any documentation pertaining to the licensee and licensor. Royalty control should be monitored and investigated if it is believed to be inaccurate. Royalty investigations are common and even encouraged among franchises.
Royalty auditors specialize in this particular field. Royalty auditors can get you the answers you need and money that is owed to you. Usually, royalty audits can only be conducted within a two to four year window, which is discussed in your licensing contract. Royalty auditors will act fast during this period getting you what you need. A licensed auditor will waste no time getting the information, and it will usually cost less than the money you’re owed. Once a royalty audit is conducted, more times than not, companies will follow royalty compliance and not underreport royalties again.
Can you get your royalties back?
Lets say you’ve created something, but didn’t get a royalty, what next? This question comes up all too often. Can you get it back? If you find yourself in a predicament such as this the best thing to do is contact a royalty auditor. An auditor will review the licensing agreement between both parties with a fine-comb to determine where the royalties are going. Whether you have concerns about your current contract or are about to sign a new contract, royalty audits are a safeguard. If it is found that a company owes you money, then the only way to get it back is through an audit to determine how much is owed to you.
Why do royalties go underreported?
A lot of times royalties go underreported, this happens for a number of reasons; human error, confusion about licensing agreements or intentional underreporting for company gain. Once a royalty audit is conducted the auditor can find out where your money is and potentially stop the licensee from underreporting in the future. A royalty audit is a good idea for both parties and could potentially save you thousands.
Why conduct a royalty audit?
Royalty audits are conducted all the time. Say for instance, you’re a musician, and you have reason to question the amount of royalties you’ve been receiving. A royalty audit can help determine if you are entitled to additional money and help get it back for you. Maybe you’re a business owner and someone has been infringing on your company’s logo; you’re entitled to royalties for damages to your business. Royalty audits are essentially and can potentially get you back the money you should have received.