Reserves functionality allow the licensee to withhold a portion of royalty earnings to cover future returns.
In our royalty software you setup your reserve for returns rule(s) in the contract record.
Depending on your business model, you may have one reserve rule for physical products, a different rule for export sales and a third rule for products sold at a high discount. The reserve can be withheld for one or more royalty periods and can be released over one or more royalty periods.
On the royalty statement you can display a summary of reserves withheld and when they are scheduled for release.