A glossary of  royalty accounting terms.

Sales Terms

Entry Type. Each sales record; invoice or credit memo, may be associated with an entry type. The entry types are Sale, Return, Historical and Press (i.e. free). If no entry type is specified the system will use the type Sale for positive numbers and the type Return for negative numbers.

Historical is used to record the quantity sold of each edition prior to using EasyRoyalties. Historical records must be imported before the first royalty statements are generated because these quantities affect the royalty rate escalators.

Sales Type. Each sales record; invoice, may be associated with a specific revenue type. The sales types is often used to identify the type of customer. Examples are foreign, consumer, wholesale. Royalty rates can be based upon the sales type. 

Title Terms

Title. The title is the name of an intellectual property.  Example; Happy Days. Each title has a unique title code.

Each title can be linked to many editions.

Edition.The edition is the name of a format of an intellectual property. Examples are Happy Days (paperback), Happy Days (hardcover), Happy Days (ebook), Happy Days Chapter 1 (digital), Happy Days Audiobook for Children (audiobook).  The title of an edition does not have to be the same as that of the related title.

Each edition has a unique ISBN (or ISRC number for recorded music). An edition may also have a SKU or other product code. When importing sales EasyRoyalties will look for a matching ISBN, SKU (i.e. other product code) or Vendor Specific Product Code.

Each edition is linked to a single title.

ISBN.The 13 digit ISBN (International Standard Book Number) is the international identification code assigned to book and book like products. R.R. Bowker is the U.S. ISBN Agency in the United States. The Book Industry Study Group recommends that all formats of a book; printed, audio, or digital, be assigned a unique ISBN.

ISRC.The ISRC (International Standard Recording Code) is the international identification system for sound recordings and music video recordings. Each ISRC is a unique and permanent identifier for a specific recording. The International Federation of the Phonographic Industry (IFPI) recommends that all music producers use ISRC.

SKU (or other product code). Some accounting systems do not use an ISBN to identify a product. They use a product code that is also known as a SKU (stock keeping unit). This product code is often the last five or six digits of the ISBN.

Vendor Code. Some distributors use their own product codes when reporting sales to the publisher. During a sales import EasyRoyalties can link these vendor specific product code sales to the appropriate edition. To set this up you need to import or manually enter the Edition ISBN and Vendor ID for each vendor code.

Royalty Terms

Royalty Advance – An advance is a payment made to an author in advance of publication. Usually the author is paid a third upon signing, a third upon manuscript submission and the final third upon publication, or half upon signing and half upon publication. Royalty software solution such as Easy Royalties track advances.

Unearned Royalties – When an author’s royalty earnings for the period is negative. This usually occurs when net sales for a period are negative. Example: Author 1 had sales of ($10,000) during royalty period 2. The 20% royalties on this are ($2,000).

Reserve for Returns – Many publishing clients have a clause that allows the publisher to withhold a portion of royalty earnings to cover future returns from the current period’s sales.