How do I account for royalty revenue down the line in terms of paying Upwork fees?

[raf65]

Hi all

I'm wondering how I account for any royalty revenues which may arise much later on down the line as a result of a contract I completed? Do I just submit a statement to Upwork or reference the closed contract?

I can't seem to find any articles on this and would really welcome any input.

Thanks

Raf

[roberty1y]

I think the default condition is that the client owns any work you do for them. Unless royalties were in the contract, you're not in line for any.

[petra_r · Accepted solution]

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Raf S wrote:

I'm wondering how I account for any royalty revenues which may arise much later on down the line as a result of a contract I completed?

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Has a client agreed to pay you royalties? Such royalties would have to be paid by the client through Upwork. Under no circumstances would you be able or allowed to receive such money directly during the first two years.

Also remember that unless you agree this in advance, on Upwork all rights and everything passes to the person who hired you as soon as you are paid. You are not entitled to any royalties.

[raf65]

Hi Petra

I see. The client rewarded me with story credit after competion of a job well done, which theoretically could attract royalty payments (not from him but via the various unions e.g. WGA who could be signatory to a film production) and depending upon the size and scale of the film's budget.

I understand the two year rule, hence the query not to fall foul of the TOC.  I'm just wanting to be prepared to anticipate any down the line. The bonus idea may be somehting to incorporate in future to lock in the terms?

Thanks for the guidance.

Raf

[petra_r]

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Raf S wrote:

I see. The client rewarded me with story credit after competion of a job well done, which theoretically could attract royalty payments (not from him but via the various unions e.g. WGA who could be signatory to a film production) and depending upon the size and scale of the film's budget.

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Story credit alone doesn't give you any rights to any royalties or anything else for that matter... The client owns all rights unless there is an agreement to the contrary.

[raf65]

Yes. I do understand this point. However should the client offer story credit in line with industry production compensation then they would be triggered that way. I'm only trying to establish the procedure for establishing this at the outset (in respect of Upwork) to get all my ducks in a row.

[petra_r]

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Raf S wrote:

 However should the client offer story credit in line with industry production compensation then they would be triggered that way. I'm only trying to establish the procedure for establishing this at the outset (in respect of Upwork) to get all my ducks in a row.

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In that case whatever is paid would have to be paid through Upwork. 

[raf65]

I 100% agree Petra. Adhering to the TOC's is the only way that the platform will be able to survive and offer the great service that it does to the freelance community. It was only the methodology that I was trying to establish.

Thanks for all your help.

[2a05aa63]

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Petra R wrote:

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 Under no circumstances would you be able or allowed to receive such money directly during the first two years.

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Why first 2 years?

EDIT: Nevermind. I missed the exceptions on the conversion fee page.

[prestonhunter]

Raf:

You are asking about royalty payments.

That is not a supported feature within the Upwork system.

By default, there are no royalties.

In theory, you could adopt an alternative contract with a client, who could agree to pay you royalties.

Those royalties could be paid to you using the "Send bonus" tool within the client-side Upwork user interface. This would be done using the honor system.

[raf65]

Hi Preston

Yes that could make perfect sense. It's a distant reality at the moment but I'm wanting to be prepared for the eventuality so I put procedures in place.

Thanks for the advice,

Raf

[martina_plaschka]

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Raf S wrote:

Hi all

I'm wondering how I account for any royalty revenues which may arise much later on down the line as a result of a contract I completed? Do I just submit a statement to Upwork or reference the closed contract?

I can't seem to find any articles on this and would really welcome any input.

Thanks

Raf

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If a client promises royalty payments, you depend completely on his honesty in that matter. If he actually is willing to pay you, he can always do that as a bonus on a closed contract, or create a fixed price job for that payment. Do you have any means to confirm what you are owed at any point?

[raf65]

Hi Martina

That is very helpful advice. Thank you. It gives me a framework to operate in should the situation materialize into a reality. Nothing owed at as of yet - just projecting ahead (and a smattering of wishful thinking!)

Raf