Best Practices: Contracts

Best Practices: Contracts

1. Make sure every Contract has a Payee attached, otherwise no one will have access to this contract’s statements.

2. Check all contracts have the correct accounting period specified. If you only run Half-Yearly royalty periods, any contracts that are set to Quarterly or Monthly accounting period, or no accounting period selected, will not be processed when you run a Half-Yearly period.

3. Take into consideration the hierarchy of conditions when creating your contract terms. Ask yourself, a sales line that is linked to the channel Digital & configuration Stream, which royalty rate % will be applied following the below example?


If you answered 40%, you are mistaken. Channels are higher in the hierarchy than Configurations. Thus the first term, with a channel of “Digital”, overrides the second. To ensure the rate of 40% is applied to Digital Streams, the channel must be set to “Digital” alongside the configuration set to “Stream”.

4. If your contracts have escalations, did you set up your escalation tracker correctly? Make sure your starting counts are accurate. More info on how to use calculations can be found here.

5. If you take reserves against certain sales, did you also specify a reserve release schedule? The total value of the release schedule should always total 100, higher or lower would mean more or less reserves released than actually taken. For more info on reserves, please visit the respective chapter in the documentation.

6. Do you have any PPD terms? You must make sure the relevant releases have a PPD value set in the catalogue. Do you have any Retail Price or Unit Price terms? Then your templates must capture the Retail Price & Per Unit Rate values from your sales files. If missing, these contract terms would be left without a calculation input & so not calculate a royalty for your artist.

7. Did you ever change the Channels & Configurations in the settings? These changes must be reflected in your Contracts. So if you change your configuration “Stream” to “Premium Stream” & “Ad-Supported Stream” configuration, any contracts that had a term specified for “Stream” revenue would have to be updated too.