In 2014, Taylor Swift, one of the biggest US artists of all time, decided to pull out all her back catalogues from Spotify, a streaming service with at least 30 million members around the world. Swift and her team made the decision after receiving “low royalty fees” of $0.006 for every song played.
It may be a few cents, but here is another perspective: Swift is back as of June 2017 and raked in $400,000 of royalties immediately.
Accurate accounting means not feeling short-changed for the efforts, originality, and money spent on creating the product. Publishers, therefore, have to invest in a proper royalty accounting, but who should do it?
Using a Software
Start-up publishers, however, may not have the capital to spare for an accountant. Some may also choose to create or maintain a manual process. For those who are in these situations, they can use an accounting software for royalties.
For convenience and easy collaboration and use, publishers can select a cloud-based system. It means the data are accessible anytime and anywhere as long as there is a reliable Internet connection. It should also be scalable to match the growing demands of the business.
One may also use the software alongside a royalty accountant as a form of double-checking the data.
Hiring a Royalty Accountant
Mid- to large-size publishers can benefit from hiring a royalty accountant. Although one can opt for a “numbers person,” or someone who is knowledgeable with royalties, it is still ideal to choose a certified public accountant (CPA).
A CPA has completed an accounting degree and passed an exam, the requirements of which can vary among states.
A company may hire a freelancer or an accounting firm. Considering the specialty or the expertise needed to perform the job, a freelance accountant may ask for no more than $25 per hour of service. There may be a different rate for retention.
Firms usually charge more, but it also means royalty accounting is continuous. If the assigned accountant leaves, someone can take over immediately. Some may also find working with established firms more professional, convenient, and straightforward.
Royalty accounting is not easy, but there are ways to simplify the process. Choose one that is cost-effective, efficient, and reliable for you.