When I was working for a small company years ago, the extremely reliable woman who cut our paychecks missed the Big Day — a Friday. As it became evident she would be a no-show, one of my co-workers revealed she was upset. “I wrote out and mailed checks for all my bills last night because I thought I was going to get paid today. Now they’ll all bounce.”
I didn’t understand why anyone would write a check for money that wasn’t in the bank and I still don’t today. Yet over the years, I’ve discovered that many writers make similar mistakes.
Publishing contracts list payouts and give a timeline as to when they are to occur. However, things go wrong. Often. With just about every publisher. Sometimes the editor forgets to tell Accounting to release the funds. Sometimes the person who cuts the checks is out sick. Or maybe the Big Boss who authorizes checks of a certain size has left for a month-long missions trip. Or a publisher has a cash flow problem and can’t make your payment.
I’m not saying it’s wonderful and right for funds to be delayed but there are so many things that can go wrong in the process that it’s wise to plan on a late payment. The biggest money mistake a writer can make is to sit down with a contract and say, “Okay, I’ll be receiving $5,000 on July 1 because that’s what my contract says.”
When this happens and there is a delay, sometimes I get frantic communication from authors. Of course, authors are always justified in asking about delayed payments and my job is to investigate. But sometimes I discover the urgency is triggered by a purchase or other financial commitment the author has made based on promised money, not money that is already in the bank. Of course, emergencies happen that can cause debt, but I don’t recommend buying a luxury item until the money is in hand.
What is your favorite way to save money?
What is the worst money management mistake you or a friend have made?