Understanding Cost Recoupment in Tone

This guide explains how cost recoupment works in Tone, including how costs are allocated, tracked, and ultimately recouped across contracts and reporting periods. If you have questions about entering costs in-app, click to learn more about Navigating the Costs Tool.

How Cost Recoupment is Determined

Cost recoupment begins with the ****gross cost amount, entered in the Costs tool. This represents the total expense incurred. How that amount is recouped depends on what the cost is mapped to—a contract, track, or release.

Costs Mapped to a Contract

When a cost is mapped directly to a contract, it is only applied to that specific contract.

• The cost rate is applied to the gross cost amount

  • Cost Amount x Cost Rate %

• For Profit Share ****contracts, the profit share % is applied last

  • (Sales - (Cost Amount x Cost Rate %)) x Profit Share %

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  If a contract does not have a cost rate, the cost will not be reported or applied to that contract’s statement.

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Costs Mapped to a Track

When a cost is mapped to a track, it is distributed across all contracts linked to that track.

• Each contract’s track-level cost participation is applied first, then the cost rate is applied
  • Cost Amount x Cost Participation % x Cost Rate %
• For ****Profit Share contracts, the profit share % is applied last
  • (Sales - (Cost Amount x Cost Participation % x Cost Rate %)) x Profit Share %

Track-level cost participation can be manually adjusted on each contract, allowing precise control over who recoups what share.

Costs Mapped to a Release