The Royalty Audit Process Explained

Nov 5, 2025 | Royalties

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The Royalty Audit Process  

Your Royalties. Your Right to Know.

What exactly is a royalty audit?

A royalty audit is a professional review of your royalty statements and underlying financial records to confirm you’ve been paid what you’re owed. It checks whether all sales, streams, and licensing uses of your work were properly reported by your label, distributor, or publisher.

Why would someone need a royalty audit?

Because even honest accounting systems make mistakes. Complex contracts, recoupable expenses, and global reporting often lead to missed payments or misapplied deductions. A royalty audit helps uncover those gaps and protects your earnings.

How long does a royalty audit take?

A full audit typically takes a minimum of three months, depending on how complete the records are and how responsive the other party is. Larger labels or multiple agreements may take longer.

What’s the first step in the process?

It starts with a review of your contract to understand your audit rights—what can be examined, how far back you can look, and which revenue streams are included.

What happens after that?

Your audit team will send a formal notice to the label or publisher requesting access to their royalty statements, sales data, and expense records. This step opens the door for a detailed review.

What does the actual audit involve?

The audit compares what was reported to what was actually earned. Auditors examine statements, invoices, and digital sales reports to verify every revenue line tied to your work. They look for missing sales, incorrect deductions, and unreported income sources like streaming, syncs, or foreign releases.

How are findings reported?

After the review, the auditor prepares a clear summary report outlining any discrepancies and supporting evidence. This report becomes the basis for discussion or recovery.

What happens once the audit is complete?

If differences are found, the parties work toward a settlement or adjustment. The audit process often also leads to better tracking systems and clearer reporting for the future.

How often should artists or labels consider an audit?

Whenever royalty statements look inconsistent, new income streams appear, or several years have passed without review. Many professionals perform an audit every two to three years to stay compliant and informed.

What’s the main takeaway?

A royalty audit isn’t about conflict—it’s about clarity and accountability. Whether you’re an artist, producer, or label, the process ensures every stream, sale, and sync is properly counted so you can make informed decisions about your career and catalog.

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