Royalty Compliance Audit

Would a Royalty Audit benefit you?

A royalty audit should be considered part of the normal course of business of every licensor. Inaccuracies caused by infringement, misinterpretation of the license agreement, under-reporting errors and/or ineffective internal controls, can reduce royalty payments otherwise due to the royalty recipient. Royalty compliance engagements are an effective, contractual and prudent business practice to ensure that the royalty reports received by licensors or their agents are timely, complete and accurate.

For more than two decades, Miller Kaplan has concentrated on providing royalty and licensing compliance services to our clients, helping them recover millions in underpayments along the way. We pride ourselves in our communication throughout the engagement. We stay in constant contact with our clients throughout the royalty audit process, communicating procedural updates, initial findings, licensing compliance concerns and other areas of concern. In addition, we may also recommend internal controls and monitoring procedures to strengthen internal controls over the licensee’s reporting. Typically, these engagements disclose underpayments which far outweigh the cost of our performing these procedures and in many cases our fees are fully recovered from the licensee in accordance with the license agreement. In many instances the ‘right to audit’ provision in the licensing agreement has enabled the Licensor or Agent to recover from 200% to more than 1200% of the fees charged by us. At Miller Kaplan, we will accommodate all your royalty audit needs and offer solutions that will help you improve your royalty cash-flow.

A License Audit and Licensing Compliance

Often we are asked why a royalty compliance audit is necessary if we trust our licensees. The reason that a license audit is necessary is not because of deliberate non-compliance with a licensing agreement, but, because of accounting errors. During a license period these royalty amounts can be significant. Therefore, a royalty audit can mean recovery of payments and ultimately improved relationships with licensees.

We perform our license audit/ royalty audit services worldwide and do so, on localized bases in countries all over the world. Our professionals have familiarity with most industries utilizing licensing and royalty based compensation, including Apparel, Art, Automotive, Music, Television, Film, Cosmetics, Consumer Products, Sports, Food & Beverage, and Technology.

To discuss your situation with our licensing and royalty professionals, please contact us online or call us at (818)769-2010.