PAYMENT PROBLEMS (BOOKS) - PART 15

The terms for when and how you are to be paid for a book are all covered in your book contract. It should indicate that you will be paid royalties once or twice a year (contract says which), and by what specific dates. Be sure to provide yourself with reminders so you can follow-up if the payments are not forthcoming when due. Since most publishers make these payments 90 days after the end of the accounting period, there is no reason for royalty payments to be late. If you have an agent, it will be his/her job to deal with this kind of problem.

Following are some typical problems and how to deal with them yourself:

1. If your royalty payment does not arrive on time, call the editor you worked with on the book and ask them to check into it for you. Follow up with a letter to the editor (reiterating your phone conversation) and another letter to the accounting department asking if the royalty payments have been sent out, and if so, letting them know you have not received yours. If you have been paid on time in earlier accounting periods, assume this is an oversight or lost check. If this is your first royalty payment, be more aggressive—although it could be that the royalty account has not been set up or set up correctly. In any case, you will want to correct any problems immediately.
2. If this is a reputable publisher, the editor will likely follow through to correct any problems and be sure you receive your check. If the editor is evasive or uncooperative, you may have more to worry about. Don’t let the situation slide—follow through immediately and persistently until you are paid.
3. Most book publishers pay on time, so if you have trouble getting paid it is usually a good sign that the publishing house is in financial trouble. In that is the case, it is usually best to follow the “squeaky wheel” principle. Let the publisher know that if you do not receive payment within two weeks, you will take legal action to collect.
4. In some cases you may be paid on time, but you have serious questions about whether your sales were reported accurately or you were paid according to the terms of your contract. Always study your royalty statement carefully, and ask questions if there is anything you don’t understand. Royalty statements are typically impossible to interpret, so don’t be intimidated. Ask those questions until you get satisfactory answers.
5. If the answers aren’t satisfactory—and you suspect something is amiss—your contract should give you the option of paying an accountant to audit the publisher’s books in relationship to your royalty account. If the auditor finds a discrepancy of 15% or more (or the percentage indicated in your contract), they must pay that, plus the cost of the audit. Always check your contract to see what your options are (and try to get this clause added to any of your contracts before you sign them).
6. Occasionally the problem in payment may be a difference of opinion about how the contract is interpreted, or you may discover that they are not abiding by the terms of the contract in calculating your royalties. For example, the contract may stipulate that if they sell books at a greater than 50% discount to bookstores or distributors, that you will get only half the usual royalty on those sales. That is a typical clause, but your publisher may be offering that higher discount on all sales to avoid paying you full royalties. You can challenge them in such a case, especially if the contract indicates that this is to be an untypical discount. It is best to have it written right into the contract that such discounts will be limited to a certain percentage, but you can still likely win in court if the publisher is not living up to an industry standard or an author’s logical expectations.
7. Since most publishing contracts today do not allow you to sue your publisher, if you get no satisfaction in collecting your royalties or resolving differences of opinion, you may have no recourse except arbitration (which most contracts indicate).
8. Any time you have problems of any sort with your contract, always check the terms of your contract to see how to proceed. If legal action is called for, contact an attorney who is well versed in literary matters, and understands how the publishing industry operates.