Combined with MIBAR’s industry-built functionalities, NetSuite helps growing product licensing organizations reduce data latencies and eliminate organizational silos, errors and excessive manual work.
Managing data across multiple disparate and homegrown software solutions consumes a lot of time, money and valuable resources that growing companies can’t afford to give up. In the product licensing field, where royalties and rights are often managed by myriad different systems, the inefficiencies creep in as soon as the first licensing agreement is signed.
Based on a percentage of brand-related revenue generated by the licensee, brand royalty rates are determined in advance and either fixed or tiered. They may also be reduced if a seller meets a specific sales threshold, thus incentivizing the operator to sell more goods. Audits are common in this sector, where licensors want to know the fine details—often right down to the specific product that was sold.
To best manage these requirements, product licensees need enterprise resource planning (ERP) solutions that come with industry-specific functionalities. This single system will replace the many different applications, spreadsheets and manual processes that growing product licensees rely on. It also gives companies one distinct data source to work with across the entire organization—something that can’t be achieved using individual solutions, spreadsheets and email.
It’s all Baked into NetSuite
Aware of the challenges that growing and mid-market firms face when managing royalty requirements, MIBAR developed a comprehensive, industry-specific software bundle that integrates directly with NetSuite. The software aligns with large licensing agencies like the College Licensing Counsel (CLC), MLB, NHL, Disney, Viacom, NCAA and others, factoring in the individual reporting requirements of each.
NetSuite stamps every transaction with the calculated royalty values, and right in the document of origination or invoice. This provides a complete audit trail transparency and control to help manage during an audit process. “If a company is audited, handling these processes offline in Excel is subject to some error and fungibility,” said Jory Weissman, Vice President of Sales at MIBAR, a NetSuite implementation partner.
“We help companies attain a better level of audit integrity,” he added, “because all of the reporting is produced by NetSuite.”
The Royalty Code
With its preexisting functionality bundle for brand licensees, MIBAR enhances NetSuite’s native capabilities for its growing and mid-market customers. A firm that sells baseball caps with MLB logos on them, for example, can link out to a custom “royalty code” record that outlines a shorthand code. The codes may include the agency that’s being paid, the amount due, and the name/description of the asset (in this case, the baseball team’s logo).
The royalty code also tracks the preset royalty percentages for each asset and the effective start and end dates for those agreements. The items are then added to a sales order transaction and the royalty code is sourced in. Once the product is shipped, NetSuite generates an invoice for it. The information is funneled into a monthly or quarterly royalty report that can be shared with licensors and other stakeholders.
MIBAR has built out reports for different agencies, most of which require different information, data and numbers on their respective reports. According to MIBAR Solution Architect Kevin McAleer, this functionality gives licensees better visibility into what they owe their licensors for a particular asset.
“It also facilitates the movement of data to the royalty agency,” said McAleer, “so there’s no more exporting from the system, putting everything into spreadsheets, doing view look-ups to figure out what the percentages are and then calculating the report.”
One database to work from
With 15 different royalty agency reports ready to use, MIBAR’s Rights & Royalty Management Solution for NetSuite populates the fields, defines the royalty codes, factors in the percentages and does the calculations. The royalty reports are produced as a byproduct of the invoice transactions and all of the data is integrated into the company’s general ledger and/or accounting system.
“Product licensing firms get a single version of the truth to work from at all times, and greater accountability when determining what is truly owed to the royalty agency,” said McAleer. “They can also seamlessly track and aggregate their royalty data, eliminate the need for manual exports and the formatting and manipulation of data for royalty agency reporting.”
Once they’ve replaced their manual systems, disparate solutions and spreadsheets with NetSuite + MIBAR’s Rights & Royalty Management Solution, distributors and manufacturers can easily automate their royalty management and financial processes and minimize the amount of manual effort once spent managing these complex tasks. With NetSuite and the industry-built bundle in place, growing licensing firms can expect better accuracy, faster processes, improved access to all of their data, less reliance on labor and excellent audit controls.