Royalty Deficits

15 04 2013

ImageI just had to share this information. Great insights from Invotex.  This was published today in TLL (The Licensing Letter) Daily Advisor, an email newsletter offered by EPM Communications

“Royalty Deficit: Licensees Tend To Underpay, Says Invotex
Since today is Tax Day, here’s an item about auditing. According to the 2013 Royalty Compliance Report, compiled annually by Invotex, only 11% of audited licensees report royalties accurately. While 27% underreported and underpaid by 1%-5% in 2013, almost the same number (25%) underreported and underpaid by over 100%, according to the royalty compliance specialist. The remaining 26% underreported by between 6% and 99%. The top three errors that lead to the underreporting and underpayment of royalties are underreporting sales (with 55% doing so), misinterpreting the licensing agreement (38%), and overstating deductions (28%).”




One response

15 04 2013
Teresa Ascone

I’m sorry that is happening. It’s pretty discouraging, in light of the idea that the relationship is based on trust.

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