Royalty Lifecycle Management

The royalty management solution automates and streamlines the entire “agreement-approve-calculate-adjust-authorize-invoice/pay-analyze-update” cycle, making the process easier to manage while eliminating the risk of inaccurate invoices and payments. You can design and fine-tune strategies for future royalty agreements by tracking utilization metrics of historical agreements. Royalty management generally follows the same basic process:

Agreement

Model/simulate the commission plan and demonstrate confidence in plan quotas to the sales team. Finalize the plan and route it for approval by authorized personnel.

Approve

The plan is either approved or declined by appropriate personnel.

Calculate

Calculate attainment and royalty in real time as royalty reports (sales data) become available.

Review and Adjust

Once the automated calculations are completed, administrators can review and adjust attainment and royalty if necessary. Manual adjustments are tracked with an automated audit trail.

Authorize

Valid royalty need to be authorized by the appropriate personnel for invoicing (licensor) and payments (licensee).

Invoice/Pay

Invoice (licensor) and pay (licensee) the royalty amount.

Analyze

Analyze the agreement for improvement using predictive analytics.

Update

Update the agreement for the next cycle based on performance analysis.

Revenue Recognition

The Incent4 solution allows ASC 606 and IFRS 15 compliance with the ability to create estimates and actuals. Estimates can be accrued and reversed when actuals become available. All royalty activities seamlessly feed Incent4's Revenue Recognition module for creating journal entries. This ensures the correct G/L journal entries are booked for royalties. Journal entries based on estimates, reversals, and actuals can be automatically sent to your financial system.

Royalty Management Benefits

Sales

  • Know exactly how royalty agreements are working by intellectual properties and rights, product components, territory, region, customer, and customer attributes.
  • Avoid disputes by making the royalty related data, calculations, and results transparent.
  • Automate and streamline your royalty management. Remove error prone manual steps to improve accuracy and give confidence to licensor and licensees.
  • Model/simulate and demonstrate royalty agreements to create realistic royalty scenarios.
  • Provide the licensor and licensee with accurate and timely royalty invoices and payments with full audit capability.

Finance

  • Be confident all data and calculations are accurate and accounted for based on industry compliance mandates.
  • Avoid disputes and make invoicing (licensor) and payments (licensee) transparent.
  • Recognize revenue based on ASC 606 and IFRS 15 standards.

Measure Royalty Agreement Effectiveness

Incent4 not only enables accurate and timely royalty payments, but also allows royalty data and statistics to be used to objectively measure agreement and licensee performance. You get a comprehensive view of all royalty agreements and their performance, including usage metrics, royalty accruals, and exposure. These metrics can also be integrated into dashboards and analytics.

Incent4’s Customer Success team is always available to help customers manage royalty agreements, establish “best practices”, and aid in completing the cycle of calculation and invoice/payment.