Where Is My Money?

Before I became a literary agent, I had no idea how much energy this profession spent being a “collections agent.” A while ago, someone asked me the following questions:

What do you do, as an agent, when a publisher does not pay advances or royalties on time as per their legal contract?

What if a publisher is consistently late (months), saying they have cash-flow problems and will pay when they can? Shouldn’t authors be able to count on getting paid the amount and on the date stated in their contract?

Is this common, and is there anything that can be done or said regarding what seems to be a breach of contract?

This is an excellent series of questions. The full nonanswer is, “It depends.” Generally, publishers are very good about making the payments according to contracted schedules. The above situation is much more dire and is a good reason to have an agent who knows how and who to talk to inside the publishing house. There are ways to approach the situation that gets results. Just remember, “Don’t Burn a Bridge.”

It can be even worse. Last year I had a major publisher’s check bounce! That was interesting to say the least. I’ve also discovered accounting errors in royalty statements, some to our benefit, some to the publisher’s benefit. But those are other issues for another day.

Meanwhile, there are a few possible reasons authors should keep in mind before getting impatient with a tardy paycheck.

It’s in the Mail

Many contracts give the publisher 30 days to make a payment after the signing of the contract. And some will take all 30 days to generate the check.

Also note that some organizations issue checks only on a specific day of the week (like Friday). If  mailing, and they missed their post office cut off, the check won’t go out until the next Monday. Then it depends on the speed of the mail service in your area. There have literally been times too many to count in which a client has called me impatiently awaiting their check–and the check arrived the next day. Please remember to consider holidays and mail travel times when marking your calendar.

If your account is set up to receive your payments via direct deposit, this problem can be eliminated. But be careful. If you have to change your bank account for some reason, it is a challenge to reestablish the ACH links. This can happen for any number of reasons. You move to a city that necessitates changing banks. Your account info may have been stolen due to ID theft. Your joint home account needs to become a separate writing business account after you have created an LLC.

Did You Move?

Have you moved and failed to tell either your agent or your publisher? Our office moved five years ago. I still have people asking what our new address is. One is a publisher who sends the 1099 form to the wrong address repeatedly. Someone in the office failed to update that particular address.

This issue is a common one. But usually when an author is expecting payment, they remember to tell people where to send the check!

Your Work Is Not Yet Finished

The majority of contracts have a second advance payment due on the acceptance of a completed manuscript. The key word is “acceptance.” This is not the same as delivery of the manuscript. Instead, it means the editor has to run the manuscript through its paces to determine that it is indeed the book you promised to write. A few publishers will not declare a book “acceptable” until the entire editorial process has been complete and the book is ready to send to the typesetter. This can be months after the book was originally delivered. (I recall one situation when a manuscript was delivered in April and the “acceptance” money did not arrive until November.}

Why is this? Because the publisher should be able to know that what you have written is saleable. There is a famous case in the 90s where Random House sued actress and author Joan Collins. The publisher attempted to make her pay back her $1.3 million advance alleging that the manuscripts she had delivered were unpublishable. Collins won, and kept her money, because the original contract only said that the manuscript should be “complete,” not satisfactory or acceptable. Back then publishers had “complete,” not “satisfactory” in their contracts. I can guarantee that mistake will not be repeated today.

Click to view a very long segment from the actual Joan Collins trial.

And here is a PDF of the actual Joan Collins contract.

The Editor Forgot to Do the Paperwork

In my early days as an editor, I was terrible about doing this paperwork. Since I was the one who declared a manuscript “acceptable,” it was up to me to generate the payment request. There were a few times when I simply forgot. I finally got smart and delegated the task. Once a book was past a certain point in the editorial process, our managing editor created the paperwork and I signed off. Problem solved. But because of that experience, we–along with our clients–keep tabs on payments with our clients. A gentle nudge is usually sufficient to get things rolling.

Your Publisher May Be Cash Poor

For some publishers (usually much smaller ones), cash flow trouble is a reality. Back in the heat of the economic crunch in 2009, a publisher wrote to tell me they did not have the money to pay an “on signing” payment. They had been hit by huge returns, and the banks were not extending credit back then. (Read this blog post about returns and their negative effect on the economics of publishing.) The author and I appreciated being told and the humble way in which the news was given. The money did arrive within 30 days, tardy, but it was all there. Fortunately, that was a temporary thing and has not happened again.

If you are concerned, talk to your agent. In my opinion, it is your agent’s job to pursue collections. And to pursue them in a way that keeps things professional and courteous.

[An earlier form of this post ran in February 2012.]
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