Over the last decade, the CRKN team has refined its negotiations and invoicing process surrounding the core content licensing activity. The bulk of the content that CRKN licenses is on multi-year agreements, negotiated in and settled in USD, and CRKN bills its members very nearly completely in USD. To facilitate the efficient billing of members, CRKN has employed forward contracts – really, commitments to purchase known quantities of USD at a known price and date in the future – to invoice its members. While this is administratively simple, it does expose the membership to some pricing uncertainty. In recent years, the variability in the strength of the Canadian dollar has variously sheltered and punished member budgets.
In 2012 CRKN piloted a new Foreign Exchange Service with a goal of achieving greater control and predictability for member budgets. With this service, CRKN provides members the opportunity to more explicitly direct CRKN to purchase USD on their behalf – by allowing them to lock in an exchange rate 4-6 months sooner, or to leave a bid in the market for up to 6 months for a rate better than is currently available in the market. Participating institutions sign a commitment form to enter into the service and provide instructions for all, or a portion, of their estimated license amounts to be directed through this service and CRKN charges a small administrative fee to cover the process. While the service does help with the goal of cost predictability it does not guarantee better pricing for members.
Beginning with fiscal year 2015-2016, and continuing this year, CRKN has also offered members the option to be invoiced and pay in USD directly, also for a small administrative fee. This allows members the opportunity to leverage existing USD accounts that their institution may be holding.
CRKN bills the majority of its license amounts in October, November and December. In general, this is also the time that CRKN would finalize billings in CAD and USD, including booking forward contracts to finalize any un-met foreign exchange requirements.