Tag s | Money

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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How Do You Measure Success?

by Steve Laube

A few years ago while talking to some editors they described an author who was never satisfied (not revealing the name of course). It this author’s latest book had sold 50,000 copies the author wondered why the publisher didn’t sell 60,000. And if it sold 60,000 why didn’t it sell 75,000? The author was constantly pushing for “more” and was incapable of celebrating any measure of success.

Recently there has been much ink spilled on whether Indie authors are better of than authors published by traditional publishers. Pundits have laid claim to their own definition of a successful book using number, charts, and revealed earnings. Following this dialogue can be rather exhausting.

I understand the desire to measure whether or not my efforts are successful. It is a natural instinct. If it is any indication, one of our most popular blog posts has been “What are Average Book Sales?” with thousands of readers.

In one way this is a wise question so that expectations can be realistic.

In another way it is unwise in that the cliff called “Comparison” is a precipitous one. I’ve talked to depressed authors who are wounded by numbers. I’ve talked to angry authors who are incensed by a perceived lack of effort by their publisher. I’ve talked to highly frustrated authors who wonder if it is all worth it.

Ultimately I can’t help but think this is all an exercise in determining a definition of success for the individual author. If you can measure it you can define it. That is as long as we know what “it” is.

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Who Gets Paid in Publishing?

With all the talk about Independent publishing vs. Traditional publishing and the talk about how writers can get rich if they follow a certain plan…I got to thinking. Maybe we should do a quick look at the Economics of Publishing to see if anyone is making off like a bandit. Sorry for you non-numbers people, but it is critical to understand the infrastructure (i.e. the lifeblood) that keeps your ideas in print.

The detective in the movie says “Follow the money,” so we shall. But first a disclaimer. These models are estimates based on years of reading contracts, profit and loss sheets, spreadsheets, and royalty statements. Your mileage may vary.

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How Authors Make Money

So, you’ve written a book. Good for you. Now the money will start rolling in, right? Not exactly. There are a number of ways authors make money, but writing a book is only one step in a long and arduous journey. And, though the details vary widely from one author …

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Many Happy (?) Returns!

by Steve Laube

Every first-time author is confronted by the reality of “Reserves Against Returns” as part of publishing economics. It is usually a shock and elicits a phone call to their agent crying “What happened to my money?”

Did you realize that book publishing is the only “hard goods” industry where the product sold by the supplier to a vendor can be returned? This does not happen with electronics, clothing, shoes, handbags, cars, tires…you name it. If it is a durable good the vendor who buys it, owns it (which is why there are Outlet Malls – to sell the remaining inventory). Except for books. Somewhere along the line the publishers agreed to allow stores to return unsold inventory for credit. In one sense, publishers are selling their books on consignment. Bargain books are actually resold by the publisher (after getting returns or to reduce overprinted inventory) to a new specialty bargain bookseller or division of a chain (which buys the bargain books non-returnable).

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The Minimum Wage Author

Most authors earn less than legal minimum wage writing books. Most do so for their entire writing careers. (U.S. Federal minimum wage is $7.25 per hour. A full time person working 40 hours per week would earn an annual revenue of $15,000 at that rate.) In fact, they work for …

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Your Money is Your Business or Keep a Lid on How Much Money You Make

How much should author friends reveal to each other about contracts or other business dealings when they have business with the same publisher?

I think it is a huge mistake to reveal the amount of your advances to other authors. This is similar to finding out the salary of the co-worker in the office cubicle next to yours. When I was a retail store manager we had major problems when salaries were revealed, a near fist-fight between two people who had been friends.

Money is viewed as a measure of worth; i.e. a measure of the worthiness of your work.

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Actually, It Is About Money

It is well-documented, Jesus spoke about money more than any other subject, as recorded in Scripture. He knew it was part of everyone’s life and used it often to teach a myriad of lessons. Still, money can be a polarizing topic. One of my favorite sports books is Moneyball: The …

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Show Me the Money!

I’ll never forget the Sunday I was getting ready to leave church, and the pastor’s wife came up to me and touched my arm. “Karen, my son can’t find a job, so he’s decided to make some fast money by writing a book and having it published. Do you have …

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