Keeping royalty contracts on track

KPMG Contract Compliance Services

Filippo Puglisi-Alibrandi

Filippo Puglisi-Alibrandi

Principal, Advisory, Forensic, KPMG US

+1 213-955-8393

KPMG Contract Compliance Services (Contract Advisory) professionals help determine compliance of your third-party contractual relationships to help protect your bottom line.

If your organization licenses its intellectual property, royalty revenue likely is a key contributor to your bottom line. It’s important to consider how well you are monitoring compliance of your third-party contractual relationships, identifying errors, and ultimately helping to recover lost revenue or overcharges. While most licensees do not purposely underreport the amount of money they owe, KPMG estimates that as much as 70 percent of self-reporting by business partners or customers is inaccurate.

Benefits of reviewing your licensees

ROI & Cost Recovery

Mitigate Risk

Drive Better Behavior

Improve Profits

Protect Your Intellectual Property

Improve Transparency


Common errors

KPMG‘s Contract Advisory professionals have identified issues of contractual noncompliance or misreporting more than 90 percent of the time while conducting contract compliance reviews. Several factors contribute to this prevalence, including:

  • Deductions from gross revenue that are not allowable per the agreement
  • Royalty calculations for bundled products that are not clearly defined in the agreement
  • Missed products due to the introduction of additional products and/or manufacturing facilities
  • Intercompany sales not being captured in the data gathering process for royalty calculations
  • Licensee applying incorrect royalty rates per the contract due to tiered or changing rates
  • Rate changes not being captured when pegged to indices such as the Consumer Price Index
  • Differences in contract interpretation

KPMG Difference


Return on investment (recoveries to our fees)


dedicated resources in the US, over 300 internationally.


concurrent engagements in over 10 industries

How KPMG can help

KPMG’s Contract Advisory professionals seek out the root causes of underpayments and offer recommendations to help prevent potential future losses and strengthen the underlying licensing relationships. We specialize in a nonadversarial facts-based approach that helps clients identify significant cost recoveries and other improvement opportunities, while respecting business relationships. Key potential benefits of a royalty compliance review program include:

  • improved monitoring of business relationships
  • enhanced controls and internal process consistency
  • measurable return on investment (ROI)
  • better protection of intellectual property.

Industries served:

  • Consumer & Retail
  • Fashion and Luxury
  • Media, Music and Entertainment
  • Life Sciences & Pharmaceuticals
  • Oil & Gas
  • Technology and Telecommunications
  • and more