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What a "Royalty Close" Is, and Why You Should Have One

The Royalty Close Every finance team knows what a "month-end close" is: a defined process for reconciling the books, reviewing the numbers, getting sign-off, and locking the period before moving on. It's not glamorous, but it's the reason a finance team can trust its own numbers. Royalty accounting rarely gets the same treatment. Statements go out, income comes in, and the underlying numbers often don't get formally reconciled, reviewed, and closed the way a company's financials do. That gap is where small errors compound — quietly, period after period — into numbers nobody fully trusts anymore. We think royalty accounting deserves its own version of a close.  We call it the Royalty Close. It's the process of moving from the statements have been calculated to we are prepared to stand behind the numbers. The Five Stages Allocated. Income for the period is allocated across the relevant contracts, splits, and cost pools. This is the raw assignment step ...
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Why the Music Businesses Need a Subledger

There is a problem in the music business that I think we've gotten so used to working around that we don't always recognize it as a problem. Music rights businesses have accounting systems. They have royalty systems. They have contracts, distributor statements, bank accounts, payment systems and spreadsheets. What they often don't have is a layer that connects all of those things. That's where I think the concept of a subledger becomes important.   The general ledger can't tell the whole story A company's general ledger tell you about the financial position of the company. It can tell you how much revenue was recorded, the balance of your royalty liabilities, and how much cash you have in the bank. What it isn't necessarily designed to do is tell you the operational story underneath those numbers. And that operational story is always what the people running music companies actually want to know. How are we doing? What have we earned but not collected? What a...
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Why Better Royalty Infrastructure Shouldn't Mean Another Expensive Subscription

One of the questions I've been thinking about while building Royalty Partners is a fairly obvious one: Will customers pay for this? It's an important question because the music industry already spends a tremendous amount of money on  administration. Labels and publishers pay distributors. They pay for royalty calculation systems. They pay accountants and administrators. They pay banking and transaction fees. They pay for foreign exchange. And, very often, they still employ people to move information manually between all of those systems. So if Royalty Partners is simply another piece of software layered on top of that stack, I'm not sure we've solved enough of the problem. I don't want the answer to better financial infrastructure for independent music companies to be another big software bill. Luckily, there are other ways to build financial software. Some of the companies I've found most interesting as I've been building Royalty Partners are financial tech...
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Why an Expense Is More Than an Expense in the Music Business

One of the problems I wanted to solve when I started building Royalty Partners was expense management. For a royalty administrator, expenses have always been surprisingly difficult. The expense itself usually originates in an accounting system or on a corporate card, in an invoice or sometimes in a spreadsheet — but the information needed to administer it often belongs somewhere entirely different. Which artist does it relate to? Which release? Is it recoupable under the agreement? At what percentage? Has it already been charged to the artist's account? Has it made its way into the royalty system? And ultimately, how does this expense affect the economics of the deal? Connecting an expense to the royalty account it ultimately affects has historically required a lot of manual work. And, getting that connection right matters. A $5,000 marketing expense might belong to a particular release. It might need to be allocated across several projects. So recording that the company spent $5,0...
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