What is a Royalty Audit?

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A royalty audit verifies if a Licensee is complying with the license/contract, including payments, research milestones, advertising or any other clause that allows itself to be tested by an independent party

 
 
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Provides quantified supported findings for negotiation and collection
 

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Identifies areas of ambiguity for improved future license agreements
 

 

MAGNITUDE OF MISREPORTING
 

86% of Licensees Audited Underreported Royalties

 
 
 

AUDIT OUTCOMES

  • Recover cash due
  • Modify templates to clarify future agreements
  • Amend license language in light of audit findings
  • Educate internal staff about license language for future licenses
  • Better internal analysis of royalty reports
  • Expand upon and create a more robust compliance program
  • The audit process brings to light possible differences in interpretations and allows for prompt discussion and feedback on those issues
  • Audits are the perfect platform to rekindle communications between Licensor and Licensee while also highlighting and strengthening the mutual benefits of the business relationship