Concert Venue Settlement Best Practices
At the end of a fantastic show, everyone just wants to get paid and go home.
Settling a show the right way guarantees that the event ends on a high note. And if you know what to look for, you might discover hundreds or even thousands of dollars that can go right back to the artist. If you can maximize an artist’s payday, they’ll want to keep you on their team for as long as possible.
Let’s take a look at the various steps involved with concert venue settlements and explore some solutions to streamline the process.
Concert Venue Settlement: A Step-By-Step Guide
Settlement is the process of reviewing the revenue and expenses associated with an event. Once the box office closes, you get to have a math party to calculate the profit and loss of the show. Depending on the agreed terms, you may also be determining the artist’s final payout.
While settlement sounds like a snooze fest, it’s an essential part of event management. Consistently having an efficient and accurate concert venue settlement process can make you stand out from other industry professionals. At the very least, it can help you hold on to your job and make people look forward to working with you.
So while it’s not the most glamorous part of the job, applying the best practices in all eight steps of the concert venue settlement process can boost your career exponentially no matter what side of the table you’re on.
Step One: View the Deal Memo
Before you enter a settlement meeting, review the deal structure for the event. You’re likely juggling multiple shows at once (especially if you’re orchestrating a tour), so going in with a fresh perspective can help you from the beginning.
You need to know whether the contract is a flat guarantee, a versus deal, or a guarantee plus percentage deal.
- Flat Guarantee: the contract states the predetermined amount for the artist’s fee. In this case, the artist does not get any additional money from the event.
- Versus Deal: the contract states that the artist either gets a guaranteed amount or a percentage of the net income, whichever is greater. In many cases, the artist’s fee is about 85%.
- Guarantee Plus Percentage Deal: in some cases, the contract will state that the artist gets a guaranteed amount plus a percentage of the net income. Generally, the percentage bonus is based on the number of tickets sold or another performance benchmark.
Related: Venue Management Software: Why You Need it NOW
Step Two: Request an Updated Deposit Report
Once you know what kind of deal you’re working with, ask to see an updated deposit report. The deposit report will identify how much money the artist has already been paid for the event.
Knowing how much has already been given to the artist will help you determine everyone’s final payouts.
Step Three: Determine How You Want to be Paid
You probably already have an idea of how you want to be paid, so you want to make it as easy as possible for the final payments to go out.
Being upfront about whether you want your payment in cash, check, or wire can help the process go smoothly. For example, if you’re going to be paid by wire, you’ll need to have the wiring instructions on hand, including the account information for where the deposit should be routed.
At this point of the concert venue settlement process, you’ll also want to make sure that you’ve received or given your settlement contact a W9.
Step Four: Start Preparing Your Settlement Document
As you begin to build the settlement for the event, you’ll start by inputting basic information into a template, spreadsheet, or word processor.
The basic information will include items such as:
- Artist name
- Date of event
- Location (City, State)
- Artist Fee
Step Five: Add Budgeted Expenses to the Settlement Document
Now you’ll line up the data you have in your budget lines up with the expenses agreed to in the deal memo. After this check, you can add the numbers to your settlement document.
Related: Concert Cost Breakdown: Where Does the Money Go?
Step Six: Request a Preliminary Settlement
Once you have a drafted settlement document, all parties can review the proposed settlement. This gives everyone a chance to check the reported expenses to see if anything is higher than it should be.
Additionally, you can look at whether there are lower expenses that can be used to benefit the event or mark any costs you want to revisit in the next version of the document or in a settlement meeting.
Step Seven: Request the Final Settlement
Now that you’re almost ready to shake hands, ask for the final settlement. This allows you to go through the document with a fine-toothed comb to make sure everything looks good.
The final settlement will include all receipts, invoices, and backup documents to verify the amounts spent. You’ll use this data to compare the actual costs with your budget.
Every expense listed in the settlement should have a supporting document. If something is missing, you need to do what you can to find a receipt or invoice to match with the line item.
As you review the final settlement, ask yourself:
- Are there any costs that went over or under budget? Why did this happen?
- Do the reported expenses make sense?
- Are the calculations accurate?
- Are the totals for GBOR and artist’s payment correct?
- Is everyone reporting the same numbers across the board?
If everything looks good on your end, it’s time to close the deal.
Step Eight: Have a Settlement Meeting
Gather everyone involved to review the final settlement document and resolve any issues, errors, or questions pertaining to the document.
Once everyone is happy, everyone will sign the final settlement digitally or physically. Then everyone gets paid, and you can focus on your next phenomenal event.
Automating the Concert Venue Settlement Process
As you can see, the concert venue settlement process can be lengthy because of all of the moving parts involved.
All too often, numbers can be missed or miscalculated. Or the invoice you’re looking for is buried deep in your email inbox. Since concert venue settlements are such an essential aspect of event management, you don’t want to take the chance of getting something wrong.
Luckily, there’s software to help you streamline the settlement process to guarantee success and happy event professionals.
With an integrated platform, you’ll never have to worry about a rogue receipt again because you’ll have all of your documents in one place. From the moment you begin planning an event, you can keep track of your deal, budget, adjustments, payout methods, expenses, and revenue.
With the help of event management technology, you can create a customized, branded settlement sheet that automatically inserts the financial data. Imagine a settlement process where you don’t even have to look at a calculator. It saves you time and ensures that your final amounts are accurate.
Instead of relying on human data entry to calculate tax payments or other variable expenses, your software can take care of it instantaneously. That way, you’re never in danger of underpaying or overpaying your artist.
Additionally, you’ll be able to share your settlement sheet with everyone involved for a quick, easy settlement.
Prism offers the complete package to streamline settlement and every other aspect of live music events. Our system was built by music industry professionals for music industry professionals, so we can guarantee it has all the tools you need. Get started with Prism today and see just how easy concert venue settlement and overall management can be.