TOTAL LICENSING
Starting out Strong
the key to licensing administration
Managing and tracking creative, rights management and royalty validation in one
comprehensive system can benefit all parties in a licensing deal
by Marty Malysz,
Sometimes it seems as if a licensing culate to the proper parties, both Financial Compliance
Dependable
organization’s creative team, its sales within and outside the organization, The finance department is miles
Solutions, Inc.
team and its royalty professionals live and this collaboration allows initial downstream from the creative proc-
in different worlds. Although they may designs to evolve until they transition ess, taking over once sales are rolling,
be under one roof, getting your teams into saleable goods. If your creative managing accounting and generating
to share information relating to the li- staff is working within the bounds of sales reports. But it is here where the
censing processes is a formidable task. the contracts from the beginning, the various licensing and creative steps, all
An increased focus on tightening up process will be streamlined.
the links between your departments Even more importantly, integrating the
“...tying the creative
will have huge dividends in bringing creative and contract management
process into financial and
“..Sometimes it
your products to market with fewer processes can prevent unauthorized
legal also has benefits on the
seems as if a resources, stronger communications products from reaching store shelves. back end...”
licensing and tighter controls. A case in point:
“All too often, products are on the
organization’s
product development. Often the crea- shelf and being sold before final writ- tracked and recorded along with way,
creative team, its
tive process is done in isolation, and ten approvals have been obtained,” come together. Which products have
sales team and
anything goes. But if creatives have says Jennifer Raugh, CFO Consultant made it through the approval proc-
its royalty
easy access to the terms of the deal at Premier Accounting. “Licensors ess? What restrictions apply to each
professionals
they can create with those provisions have very little tolerance for noncom- reported sale? Which properties and
in mind right from the start. This saves pliance.” products are associated with which
live in different
time and money and can help prevent Rights Management guarantees? In order to monitor li-
worlds...”
unauthorized items from hitting store In addition to streamlining develop- censed goods, generate royalty and
shelves. ment costs and preventing unauthor- sales statements and ensure proper
“At the beginning of many licensing ized goods from slipping through, ty- payment of royalties and guarantees,
relationships, the product approval ing the creative process into financial accountants refer to the informa-
process is a second thought,” says and legal also has benefits on the back tion compiled during the creative and
David Gebel, co-founder and partner end. Integrating creative and con- rights management processes. If crea-
of Access Licensing Group. “But it will tracts is also beneficial from a busi- tive and rights management personnel
end up being one of the most critical ness point of view. As the product are aware of the needs of the financial
elements of the relationship between goes through the design and approval management team, the whole process
the licensee and the licensor and process, the administration process is comes together smoothly.
agent.” also in full swing. The license adminis- Tying It All Together
Channeling Creative tration team tracks who the licensor All of these processes encompass a
All great products come from an ini- or agent is and who gets paid; what great volume of data, which can be dif-
tial creative design, then are continu- is being licensed, including restrictions ficult to manage and track using email
ally refined until they’re ready to go such as on categories or languages; or manual processes. Setting up a fully
on the market. Designers and product where the products can be sold, in- integrated automation system that
specialists allow their imaginations to cluding in which territories, distribu- ties the approval process to license
flow as they create their concepts, tion tiers and retailers; and how the administration benefits all depart-
but at the same time they must work licensing deal impacts business plans ments within an organization and all
within the constraints of the licens- and forecasts. Not only does a system parties involved in a licensing deal.
Dependable Solutions,
ing contract. This means using colors that ties together creative with all of With fully integrated systems in place,
Inc. offers web-based
required by a licensor, working with these administrative details increase you should see an immediate payback
licensing-management
approved type styles and character efficiencies, but executives can look on catching unapproved SKUs sold at
software, for licensees
designs, and creating items and cat- back and see which products did not retail, deductions or allowances not
or licensors, and show
how managing licens-
egories authorized by the licensor or make it through the approval process properly taken, out-of-bounds sales,
ing operations over a
agent. In essence, ideas become reality and which territories or retailers per- and improperly recouped guarantees.
standard web
through the approval process. formed well. This helps inform manag- A solution to any of these issues usu-
connection can Designs, preproduction samples, fin-
ers to make better business decisions ally pays for the cost of implementing
streamline business ished products and packaging cir- down the road. the entire system.
110
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