Royalty Accounting for Music Industry Professionals

I’ll go a little extra in-depth so that you can feel completely confident in how your money comes in. Earlier we covered how money flows from Record Labels and Digital Distributors in the Mechanical Royalties section. But there is more money out there for you to collect and this could be the difference between being able to pay rent or not! music industry accounting The bad part is that this is where it starts to get complicated when it comes to on-demand streaming platforms such as Spotify, Rdio, Beats, or Rhapsody. Depending on your status as an artist (meaning whether you are signed to a Major Record Label, Independent Label, or are an Indie Artist yourself) the flow of money changes drastically.

• Reprtoir works directly with a number of streaming platforms and has business relationships with retailers, distributors, and aggregators.
• In both the Recording and the Composition, multiple stakeholders collect a percentage of the royalties the music they work on generate.
• Each label can have custom split settings and each track artist can have custom splits which override the label default split settings.
• This type of royalty applies to copyrighted music transcribed to a print piece such as sheet music and then distributed through a print music publisher such as Alfred Music or Hal Leonard.
• Automate your reporting process and build stronger, more trusting relationships with your artists.
• More important, having your music on people’s phones is a great source of promotion.

In the seventh and last episode of our guide, we want to give you some basics about music royalties, so you can understand the mechanics behind your label’s royalty accounting. Entertainment industry accountants can help you create profit and loss statements, cash flow analyses, and balance sheets. Accountants specializing in the entertainment industry can help you account for royalties and file your taxes to take into account the various factors that come into play for your music business. They can also advise you on the best entity structure for your entertainment business and apply interstate accounting tax laws to ensure that you aren’t paying double taxation. Musicians can deduct a wide variety of expenses, like instruments, computers, websites, travel, expenses related to grooming, and more. Inaccurate accounting for royalties can also lead to penalties with the IRS.

REAL PEOPLE WITH REAL SOLUTIONS

Believe in yourself, your ability to learn and grow, and that you can find a way to make your living in music. Music revenue leakage by inaccurate calculations and forecasts can be avoided by using Music Royalty Accounting for your music business. The Music CPA has been providing accounting services to musicians and the music industry for over 25 years. Royalty Review Council’s royalty accounting services for record labels and music publishers is unrivaled. We offer a complete cost-effective professional alternative to a traditional in-house music royalty department.

If you are a record label or a distributor and are looking for an accounting software to handle royalty payments for your artists and clients, LabelGrid offers a system to streamline these operations. LabelGrid generates quarterly or monthly artist statements or label statements with an automated invoicing management system to save time and keep things organized. IRIS is a music royalty accounting software system for publishing royalty management and reporting. This is royalty software built for the complexities and scale of the digital age.

Industry Expertise

For a small fee, a digital distributor such as CD Baby, Distrokid, or Tunecore will digitally release your music across a variety of streaming sites and music retailers. Same as before, digital distributors might take a percentage of every sale before the funds reach your bank account, but this percentage is usually under 15%. Usually, your record label would take a hefty cut of your earnings at this point, but the benefit of being independent is that you get to keep everything. From managing sales to processing royalties and reports to generating payments, we cover every stage of the royalty accounting journey. Whether you are exploring a royalty solution for the first time or want to take your operations to the next level, we have the tools to help. We specialize in helping audiobook publishers, but our royalty software is perfect for anyone looking to manage their royalties better.

• Musicians can deduct a wide variety of expenses, like instruments, computers, websites, travel, expenses related to grooming, and more.
• Both copyrights generate royalties based on different uses of the composition or recording.
• Fully manage your contract terms.Create beautiful and informative royalty statements.
• To avoid this, you can enlist the services of a Publishing Administration Company who will collect your Publishing Royalties on your behalf.
• More than just accounting software, eddy.app offers detailed business insights based on sales data, available both for labels and artists via their dedicated portal.
• The person or band who records the song owns the recording copyright.
• Young Art Records approached Royalty Solutions Corp to oversee and facilitate an upgrade and full changeover to a more transparent digital royalty system, for a ten-year catalogue with multiple artists, collaborators and sources of income.
• Automate your music royalty accounting and build stronger, more trusting relationships with your artists.
• We can also help small record labels when calculating the royalties due to their songwriters.

They are fast, accurate and transparent in processing our music royalties from various sources and platforms. They also provide us with detailed reports and analytics that help us understand our revenue streams and optimize our marketing strategies. Royalty Solutions is a reliable and professional partner that we highly recommend to any music creator or publisher who wants to get paid fairly and efficiently for their work. In many cases, music rights owners, especially new buyers, may be unfamiliar with the complicated way in which royalties are generated and paid. Note that music-recording royalties, a different type of royalty related to the use of sound recordings, are beyond the scope of this article.

TikTok Pays Artists ‘Almost Nothing’ in Music Royalties – And the Industry is Losing Patience

Royalty Solutions provided excellent royalty management services for our publishing company. While they are technically an outside consultant, they feel like part of the team. I would recommend them to any publishing company looking to streamline their operation by outsourcing royalty management and/or registrations.

Become friendly with people who run recording studios, as they often record talented acts. If you want to work full-time in the music industry, you should be investing full-time hours, or at least the free time available to you, to hone your skills. Today, a copyright for your music is auto-generated whenever a tangible product is born. This means physically recording a new song in a recording studio, or writing your own music on a single sheet of music with pen & paper – this warrants a copyright.

If you are the rights holder for the sound recording of your music, you may want to register that work with the US Copyright Office. The innovations are the latest in a series of proprietary solutions developed to empower labels and artists to build their businesses through innovative insights and tools. Hit your deadlines – Our automated solutions ensure you deliver your promised royalty payments on time, every time. MetaComet®’s trusted audio & music publishing software manages complex contracts and royalties and drastically reduces your effort. Thanks for your interest in MetaComet®’s market-leading music & audio royalty solution. We provide royalty software that delivers effortless and accurate royalty calculations to audio publishing clients around the globe.

We are one of the few CPA firms that understand the complexities of royalty accounting and royalty licensing analysis. If you have hit it big, or planning the next wave to sweep the industry, the accounting for the royalty agreement materially affects your overall financial success. LabelGrid accounting software for Record Labels and Distributors offers transparency with trends and sales reports from your royalty data. In such case, you’d register the recordings you own or represent to the non-profit collective rights management organization, SoundExchange, (you can use SonoSuite’s integration to manage this type of royalties). In Europe, Collective Management Organizations (CMOs) are in charge of collecting both performance and mechanical royalties for copyrighted owners and administrators. Sometimes you’d need to register your artists’ recordings to the corresponding collection society, depending on the country your business operates.

What This Guide Will Not Do

Having the correct accounting software set up makes the tax filing process simpler, especially when set up correctly by a CPA who can ensure the royalty management software you use integrates properly within your Quickbooks setup. We are headquartered in the heart of the Hollywood production hub, which has made us a convenient and trusted resource for our entertainment and media clients – including individuals, record labels, production companies, and more. Most people don’t realize there are different types of royalties in music and that said royalties are generated in a variety of different ways.