Friday, January 28, 2011

The New Way to Get Paid

If you aren't a client of The Zack Company, Inc., but you are a published author with an agent, and your agent tells you he hasn't gotten the check from the publisher yet, it might be time to find a new agent (maybe me?) because your agent is apparently behind the times.

Nearly every major publisher now makes payments to my firm via ACH.  This is, essentially, the same as Direct Deposit, which most of us are familiar with if we collect a regular paycheck at the office.  I am currently receiving advances and royalties via ACH from Random House, Simon & Schuster, Penguin, Wiley, and Wizards of the Coast.  I also get payments via wire or ACH from Macmillan imprints, though the preference is always ACH, since my bank does not charge to receive such payments (but charges to receive a wire).  The largest publisher that's yet to implement this (why not, I can't imagine) is Perseus.  When one considers the costs of printing and mailing checks, versus using ACH, there's a huge advantage to using ACH.

The one major headache in receiving ACH payments, though, is reconciling them.  While Simon & Schuster's Royalty Department sends an email outlining the payments they are sending (as required by contract) and Random House has an automated process that sends you a notice, none of the other publishers send any notice at all, even if required by contract.  Most likely, they consider the actual royalty statement that still arrives in hardcopy via the US Mail to be sufficient notice.  And likely it is, except that it generally arrives a week or more after the payment arrives.

The time has come for publishers to become more efficient at paying authors.  The technology is certainly there.  If you do business with Amazon's Associates program (as many authors do), then you have already seen it in action.  Amazon notifies you the payment is headed your way and provides a link to go see the details.  Wiley has a similar operation, but not as slick.

Frankly, though, I would settle for the statements showing up as PDFs (searchable, please), rather than stacks of paper in the mail.  The cost savings in paper, printing, and mailing for publishers would certainly be six figures or even seven figures a year.  This would clearly offset the development costs of a system that lets publishers deliver statements and payments electronically.  And once that system is in place, publishers could easily begin the process of paying authors more often, moving from twice a year to four times a year, minimum.  Right now, most authors have accounting periods that end on June 30th and December 31st.  They then pay authors ninety to 120 days later, after they have massaged the numbers and calculated advantageous reserves for returns.  I have no complaints regarding reserves as long as they are reasonable, but it does not take modern systems three or four months to do those calculations.  Payments should be faster, period.

As an agent, I scan and email every statement, earned out or not (if your agent doesn't send you the  statements on titles that haven't earned out, how do you know they haven't earned out?).  Most of my clients are still paid by check because my accounting software is limited in its ACH capabilities.  But as the capabilities improve, I certainly expect to be paying more and more clients via ACH.

We are swiftly moving to a more paperless and check-free world.  Publishers and agents need to get on board or risk looking like Luddites.

Z

No comments:

Post a Comment

We will not publish Anonymous comments. If you would like to comment, you should sign your comment with your name, city and state, e.g., John Smith, San Diego, CA. Otherwise we will be forced to reject your comment.

Also, please do not query us here or ask if we would "be interested in" your book. Our query guidelines are clearly outlined on our website and you should follow them if you would like us to consider your work.

Thank you.