< back to full list of articles
Four Consequences of Poor Book Royalty Management

or Article Tags


by David Marlin, Co-Founder, MetaComet Systems —

David Marlin

Mistakes and inefficiencies in royalty calculations and payments can quickly escalate into publishing horror stories, but MetaComet has the remedies.

Everyone in publishing has first or secondhand horror stories to tell—of bad decisions and simple mistakes that caused serious disruption or even ended a business. Having been in the royalty software world for over 20 years, MetaComet knows that they are all too common in the field of royalties. The good news is they can be prevented. Here are four of the biggest traps we can help you avoid.

1. Paying Out Too Much

Inefficient royalty management can quickly lead to the overpayment of monies to authors. We’ve met publishers whose payments have been too high for years—great news for authors, but not so good for the bottom line. Duplicated imports of sales data and incorrect balance carryovers are particularly common problems, and contract clauses like royalty escalators can quickly create errors in calculation.

Really bad scenarios, where publishers have needlessly paid out tens of thousands of dollars, aren’t as rare as you might think. What’s more, it’s very hard—and usually impossible—to claim that money back at a later date. By automating royalty management with MetaComet’s royalty software, one can simplify calculations and end overpayment at a stroke.

2. Paying Out Too Little

Perhaps the only thing worse than overpayment is underpayment. Thankfully, this is a relatively rare occurrence, but when authors discover that payments have been too low, it can cause significant financial and reputational damage.

When we started working with one publisher who had been outsourcing royalties, we discovered that the numbers had been way off for years. This publisher hadn’t intended to underpay its authors. Like virtually all royalty errors we encounter, it was an honest mistake—the result of poor practice rather than duplicity.

But regardless of the motive, putting errors right can be very costly. Repaying sums instantly impacts the bottom line. It also leads to distrust among authors, who may question whether their publisher is a reliable business partner. They might be less inclined to sign further contracts, or to recommend the business to other authors. Our royalty software solutions can help smooth out royalty calculations and ensure that all authors are properly rewarded.

3. Wasted Time

We’ve seen countless examples of publishers attempting to manage their royalties single-handedly. This can be a reasonable approach in the early days of building a business, when sales data can be handled on a simple spreadsheet. But once a list of books reaches double figures, calculating, recording, and paying royalties becomes a complex and time-consuming task.

In the worst cases we’ve seen, manual royalty management has absorbed hundreds of hours of staff time over the course of a year—hours that would have been far better spent on implementing growth strategies for the business. We’ve met publishers who were forced to spend many days each month buried in spreadsheets, contracts, and sales records, desperately trying to reconcile royalty accounts.

Manual calculations aren’t just labor intensive but stressful. It’s very satisfying to see our royalty software release publishers from these burdens and make their working days their own again. Our solutions can free new businesses to do what they entered publishing for: publish great content.

4. The Skills Gap

At new or small publishers in particular, the task of royalty management is often handed to one member of staff. That’s fine so long as that person has the skills and interest to handle the task—and so long as he or she remains with the business. But what happens if that team member leaves the business or falls sick? When they do so, they take royalty know-how with them, and if transitions aren’t managed well, it leaves the business with a damaging knowledge gap. Filling the hole, by working out the processes that colleagues have left behind, or hiring someone else to replace them with their own ways of working, is laborious and costly. At MetaComet, we don’t just keep royalty management in one person’s head. We provide full, friendly support for our solutions so that help is always at hand for your queries or difficulties.

Don’t let these horror stories happen to you. Now more than ever it is vital to create solid foundations on which to build a successful publishing business. Investing in a professional royalty management system that protects profits and motivates authors is an essential element of that.

IBPA Member Discount

IBPA members receive a discount on MetaComet’s services:

  • 20% discount on setup fees
  • 10% discount on monthly fees
  • Integrate seamlessly with existing systems
  • Cut costs and increase efficiency by automating tedious, repetitive tasks
  • Cloud-based platform
  • Save significant time, reduce the risk of errors, and provide deep insight into financials and royalty payments
  • Enhance author relationships by providing online access to contracts, statements, and any other documents

Learn more at ibpa-online.org/metacomet.

David Marlin co-founded MetaComet® Systems in 2000. Beyond his expertise in the world of royalty automation, Marlin is committed to enhancing the technological capabilities of the publishing world through his work as the founding co-chairman of the Book Industry Study Group’s (BISG) Digital Sales Reporting Committee and a former co-chair of the BISG Rights Committee. He is a regular speaker and contributor to industry events and symposia.

Connect With Us

1020 Manhattan Beach Blvd., Suite 204 Manhattan Beach, CA 90266
P: 310-546-1818 F: 310-546-3939 E: info@IBPA-online.org
© Independent Book Publishers Association