Royalty accounting, in plain English

Money paid ahead of future royalties. A recoupable advance is recovered from the earnings specified in the agreement. The contract determines which income can recoup it and any repayment obligations.

Illustrative example: Assume a EUR 1,000 advance is fully recoupable from one deal's royalties. EUR 300 of eligible earnings leaves EUR 700 unrecouped, before other costs or adjustments.

Sources: Musicians' Union: recording agreements; Qlero: recording advances

The collection of works, recordings or releases owned or administered, depending on context. Qlero's recordings repertoire distinguishes individual tracks from releases that package them. Linking a recording to a release does not establish ownership of the composition.

Illustrative example: One recording appears on a single, an EP and a compilation. Qlero can link that track to several releases; contracts and rights still need their own records.

Sources: Qlero: tracks and releases

Using earnings from one agreed pool of releases or deals to recover a deficit from another, where the agreement permits it. In Qlero, cross-recoupment settings and thresholds control transfers between contracts, accounts and payees. Creating additional accounts and changing account settings require Pro or Enterprise.

Illustrative example: If two deals may recoup together, EUR 1,000 of earnings can offset a EUR 600 deficit, leaving EUR 400. Keeping their recoupment pools separate produces different balances.

Sources: Musicians' Union: recording agreements; Qlero: cross accounting

Common Works Registration: a format for publishers and societies to exchange musical-work registration information. It concerns compositions and interested parties rather than delivery of audio recordings. Submitting a registration is distinct from resolving competing claims.

Illustrative example: A publisher sends work titles, writers and its claims through a society's CWR process. Recording identification and release delivery remain separate tasks.

Sources: CISAC: exchange formats

Digital Data Exchange develops standards for music-industry data exchange. ERN handles release information; DSR handles sales and usage reporting. Qlero's documented DDEX workflow handles selected repertoire metadata from ERN NewReleaseMessage files, not royalty-sales ingestion.

Illustrative example: A partner delivers repertoire metadata to Qlero through configured SFTP. Sales reports still follow their own import workflow. Qlero's DDEX setup requires Pro or Enterprise, a recordings licence and partner onboarding.

Sources: DDEX: release notification; DDEX: sales reporting; Qlero: repertoire delivery

Digital Service Provider: in this context, a platform offering music streams or downloads. In Qlero, distinguish the store where use happened from the source that supplied the report and the template provider identifying its layout.

Illustrative example: A distributor sends one report containing Spotify and Apple Music activity. The distributor can be the source for both rows, while each row has its own store.

Sources: Qlero: providers, sources and stores

Receipts before deductions within the relevant reporting basis. Do not assume every provider defines the field identically. In Qlero, Gross Receipts uses the row's gross amount; the selected royalty rate and participation share are then applied.

Illustrative example: On a EUR 1,000 gross and EUR 900 net row, 20% of gross is EUR 200 with 100% participation and no adjustments. Choosing gross instead of net changes the calculation.

Sources: Qlero: royalty calculation

International Standard Recording Code: an identifier for a sound recording or music video recording. It identifies the recording, not the underlying composition, a release product or permission to use it.

Illustrative example: A studio recording and a separately recorded live performance of the same song are different recordings. Use their recording identifiers, not just the song title, when matching sales data.

Sources: IFPI: ISRC

International Standard Musical Work Code: an identifier for a musical work. It does not identify a particular recording or encode current ownership shares. Several recordings can relate to the same work.

Illustrative example: A composition recorded by two performers can retain its work identity while each recording has a separate ISRC. Do not substitute the work identifier for the recording identifier.

Sources: International ISWC Agency: ISWC

Rights in a particular sound recording, separate from rights in the underlying song. A recording agreement can assign ownership or grant a licence for a defined term. Being the songwriter does not by itself establish ownership of every recording of the song.

Illustrative example: Two artists record the same composition. Each recording has its own recording rights, while both uses still involve the underlying composition rights.

Sources: Musicians' Union: recording agreements; STIM: music online and recording permissions

Royalties associated with reproducing a musical composition, such as on physical copies or through relevant download and streaming uses. They concern the song, not ownership of a recording. Licensing and collection arrangements depend on the territory and type of use.

Illustrative example: A label releasing a composition on vinyl considers the song's reproduction rights separately from permission to use its master recording.

Sources: STIM: performance, mechanical and sync rights

Rights associated with performances and sound recordings, separate from the composition. In music royalty administration this often concerns performers' and recording rightsholders' income from licensed broadcast or public use. Eligibility and distribution vary by country and collecting organisation.

Illustrative example: A radio play may generate recording-side and composition-side payments. Being credited as songwriter does not by itself establish a performer claim, and the same entitlement cannot be assumed in every territory.

Sources: PPL: getting started with royalties; PPL: international qualification

Receipts after deductions within the relevant reporting or contractual basis. Check the agreement and source report to establish those deductions. In Qlero, the Net Receipts royalty base uses the sales row's imported net amount.

Illustrative example: If a report shows EUR 1,000 gross and EUR 900 net, a 20% net-receipts royalty with 100% participation is EUR 180, assuming no other deductions or escalations.

Sources: Qlero: royalty calculation

The person or organisation to whom payment is due. In Qlero, a payee holds billing details and the balance to settle, while linked accounts group contracts. A payee may be an artist, producer or another label.

Illustrative example: One artist payee can have separate accounts for two groups of deals; creating additional accounts requires Pro or Enterprise. Review the payee balance after transfers when determining the amount to invoice or pay.

Sources: Qlero: payees, accounts and contracts; Qlero: account settings and plan limits

In a songwriting context, royalties for public performance or communication of a musical work, including relevant live, broadcast and online uses. These composition rights are separate from rights in the sound recording and its performers.

Illustrative example: A live performance of a song can generate a composition royalty under the applicable licence even when no commercial recording is played.

Sources: STIM: performance, mechanical and sync rights

Rights in the musical work, including its music and lyrics, rather than a particular recording. A publisher can own or administer agreed rights. The publishing agreement determines the publisher's role, scope and remuneration.

Illustrative example: A songwriter appoints a publisher to administer a composition while a different company controls its recorded master. These are separate rights relationships.

Sources: STIM: the music publisher's role

Checking that source data, imported values, calculations and resulting balances agree on the same currency and reporting basis. Matching a sale to a recording is only one check; a valid row or plausible total does not prove every amount is correct.

Illustrative example: Compare a provider's net total with the imported net total, then inspect exceptions. Check that a gross column was not mapped as net before investigating the artist's percentage.

Sources: Qlero: template setup and import review; Qlero: royalty calculation

Costs that an agreement permits a party to recover from specified earnings. A recording, artwork or marketing expense is not recoupable merely because it was incurred. Check eligible categories, approval requirements, caps and the percentage charged to the deal.

Illustrative example: If an agreement allocates 50% of a EUR 1,000 artwork cost to a deal with 100% cost participation, that deal bears EUR 500. Qlero requires the cost to be included in a calculated period before it affects the balance.

Sources: Musicians' Union: recording agreements; Qlero: cost allocation

Recovering an advance or eligible costs from the royalty income allowed by an agreement. The recoupment pool, cost allocation and treatment of different income streams depend on the contract; earning royalties does not necessarily mean a payment is yet due.

Illustrative example: With EUR 600 left to recoup and EUR 400 of eligible royalties, the unrecouped balance falls to EUR 200. This assumes no other transactions, thresholds or cross-accounting.

Sources: Musicians' Union: recording agreements; Qlero: balances and recoupment

The recurring work of selecting income and costs, calculating royalties, reviewing results and releasing statements. In Qlero's Advanced workflow, publication precedes closing; the Simplified workflow combines those actions. A closed period cannot be reopened.

Illustrative example: A team calculates Q2, checks balances and generated files, then publishes approved statements. With the Advanced workflow it closes the period after resolving the remaining reporting questions.

Sources: Qlero: period lifecycle

An agreed arrangement where the customer creates an invoice on the supplier's behalf. Applicable invoicing and tax rules still apply. In Qlero, self-billing is a payment-administration workflow; creating or recording an invoice does not itself move money through a bank.

Illustrative example: A record company prepares a self-bill under an agreed arrangement. For manual payment processing, it makes the bank transfer externally before recording the payment as paid in Qlero.

Sources: HMRC: self-billing arrangements; Qlero: payment runs

A percentage allocation of a defined right, income base or participation. Identify what is being split: an ownership share, a contract's participation share and its royalty rate are different concepts. Qlero uses participation and the applicable royalty rate as separate calculation inputs.

Illustrative example: EUR 1,000 net receipts × 80% participation × a 20% royalty rate produces EUR 160 before other adjustments. It is not simply 80% of the money received.

Sources: Qlero: royalty calculation

A record explaining a royalty balance through opening balances, earnings, costs, adjustments, transfers and recorded payments. Qlero provides statements at payee, account and contract levels. A sales-royalty total alone is not the same as a closing balance or cash payment.

Illustrative example: A contract can show EUR 100 in royalties and a zero closing balance because EUR 100 transferred to its account. Follow the transfer before concluding that earnings are missing.

Sources: Qlero: statement fields

The accounting window a royalty statement belongs to, such as a month or quarter. In Qlero, a period includes selected sales files and costs. The statement period alone does not establish the original sale date of every included transaction.

Illustrative example: A quarterly statement can include a provider report relating to earlier sales. Check both the reporting period and the underlying source dates when explaining the amount.

Sources: Qlero: creating a period; Qlero: statement fields

A publisher appointing another publisher to handle agreed publishing rights in specified territories for a defined term. The agreement determines the rights, duties and income shares. The linked STIM rules explain its treatment, not a worldwide default.

Illustrative example: A publisher appoints a local partner to administer a song catalog in Germany for three years, while retaining administration elsewhere. The agreement need not cover sound recordings.

Sources: STIM: distribution rules, section A.15

Amounts awaiting resolution before they can be reported. In Qlero, contract-level suspense can arise from missing terms, an unmatched territory or a missing contract exchange rate. This differs from an invalid sales row caused by missing data or an unmatched ISRC.

Illustrative example: A valid EUR sales row linked to a USD contract can remain unreported if the necessary conversion rate is missing. Supply the missing rate and reprocess the affected reporting work.

Sources: Qlero: sales row statuses

Permission to combine music with moving images, within agreed territory, term and media. Using an existing recording can require separate clearances for the composition and the recording; one licence does not automatically grant all the rights needed.

Illustrative example: Permission to use a recording in a UK film for one year does not itself grant worldwide or indefinite use. Check the composition permission as well as the recording permission.

Sources: Musicians' Union: sync licences

The country or group of countries to which a right, licence or contractual rule applies. Territory can affect which deal terms are selected; a worldwide default does not necessarily override a more specific country rule.

Illustrative example: A Qlero sales term applies one rate to worldwide streaming and another to Germany. The closer territory match selects the applicable branch for a German sale.

Sources: Qlero: royalty calculation

Tax a payer deducts from a payment and accounts for to the relevant authority. Whether royalties are subject to withholding, and whether relief is available, depends on the applicable law, recipient, documentation and any relevant treaty. The linked IRS guidance concerns US-source income.

Illustrative example: If the applicable rules require 10% withholding on EUR 1,000, EUR 100 is withheld and EUR 900 reaches the recipient. This is arithmetic using an assumed rate, not tax advice for any country.

Sources: IRS: royalty withholding; IRS: claiming treaty benefits