Other contract clauses deal with how you get paid, the number of author’s copies you will receive, and how you can purchase copies. There are a few changes you might request here in the number of copies you receive and purchase arrangements, but generally, the payment arrangements are based on the publisher’s accounting system, so there is not much if anything you can negotiate.
Accounting and Payment Arrangements
Besides the specified advance payments described in the section on royalties and advances, the publisher will pay future payments after any advances are deducted based on the publisher’s accounting and payment cycle. Often this is a biannual system, where you get a statement and accounting every six months, though some publishers only pay annually, while some pay on a quarterly basis, and occasionally some pay every month, though these more frequent payments are more common with ebook-only publishers, who have online sales and make deposits directly into your bank.
If you are dealing with the publisher directly, the payments will be paid directly to you or split between you and any co-authors, with the payments made to the lead author or split between two or more authors, based on how you are splitting the royalties based on different contributions to the book. If you have an agent, commonly the payment will go directly to the agent, who will pay you the amount due less the agent’s commission within a certain period of time, such as within 10, 15, or 30 days of receipt of these funds. In the rare case where there are separate agents for different authors, the agents will work out which agents gets what.
Commonly, there is a delay of 45 days to a few months between the time the accounting period ends and when a check will be issued to you. For example, when statements are computed twice a year, the typical six month period runs from January 1 to June 30 and from July 1 to December 31. If a publisher pays within 45 days, your check for the January to June period will go out on August 15; for July to December 31 on February 15. In some cases, the delay will be much longer, such as with one of my publishers who sends out a check on or before June 15 for the July to December period; on or before December 15 for the January to June period.
The accounting you receive will include the net sales for that period, as well as the sale of any rights, along with the royalty rate for each type of sales, the reasonable reserve deducted for the returns, and the amount due. Commonly, if the amount due falls below a certain level – typically under $25 or $50 — that amount will be held over for the next pay period. Should you get an overpayment as a result of copies sold but subsequently returned, this overpayment may be deducted from this work or other works that the publisher publishers. In the event you don’t get your statements and checks in a timely manner, it is your obligation to write to the publisher within a certain period of time, say 12 months, to indicate that you didn’t receive the statement, that it was incorrect, or that you didn’t get the royalty payment due. If you don’t notify the publisher within this period, you waive any right to receive the corrected statement or any royalties not received for this period.
If there is a long delay between the end of the accounting period and the payment due, you might ask for a shorter time period, though the publisher may not be able to make any changes due to the way their accounting and accounts payable system is set up. But often, this future payments clause may prove to be moot, because many books do not earn out more than their advance, so there will not be any payments due for a long long time, if ever.
If you do have more than one book with a publisher, an important agreement to seek is that the sales of the books will not be combined in figuring royalties. In other words, if one book loses money, while another book does well and earns more than it’s advance, you don’t want the losses from one book to be applied against the book that is doing well. In my experience, publishers have agreed to this, though not all will do so.
This section of the contract will spell out the number of free copies that will be sent to you. Commonly, you will receive five copies, though some publishers only send two, while others may provide ten. Occasionally publishers may even send you 20 to 25 copies if you show how you plan to use those books for promotional purposes, though you have no obligation on what you do with these books, so if the planned promotions don’t work out, those are your books to keep. In some cases, authors sell their free books, before purchasing more books.
This section will also indicate how you can buy additional books at a discount, typically 40%-50% off retail, sometimes more for larger quantities, such as 55% or 60% off if you buy a carton of books or 100 books or more. If you purchase even larger quantities, you may be able to negotiate a better discount of 65-70%. Generally, you have to pay for the shipping and handling, and pay for these purchases in advance. Normally, these books are sold to you at the author’s discount and no royalty is paid. However, sometimes you can negotiate an arrangement where you are paid a royalty on any of your purchase. Another possibility which doesn’t need to be in the contract, though sometimes it can be added if you have a retail seller’s license for selling anything, is that you can buy your books at the regular retailer discount with the royalty paid on these. In this case, you buy through your company with the publisher’s sales department and get a discount based on the number of books you buy. If you are given this option, figure out which arrangement will give you more money – buying at an author’s discount with no royalty or a royalty, or buying as a retailer.
In any case, whatever your arrangement for author’s copies, the publisher wants to encourage you to sell copies at the work through a number of methods, which include at public speaking engagements, on your website, by direct mail, through newsletters, or as a premium to local retailers. However, you are normally restricted from selling to bookstores, which the publisher reserves for its own sales.
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