Reading your royalty statements

You say that it's not uncommon for publishers to screw up royalty statements. As an agentless children's author I'm reading my own statement. I contacted the editor to get some help interpreting the thing because I couldn't make the math work. I was told I *can't* make the math work given the information on the statement. Apparently there are other factors involved that aren't given. So how, exactly, am I supposed to check my royalty statements? Is this normal? Would an agent get a different statement? Should I demand one with all the info?

Miss Snark knows when to call in the big guns.
Reading royalty statements is a good example of that.
Thus, Miss Snark places a call to the cavalry for the answer to this. Fortunatley, the cavalry is located right here in NYC on the Lexington Avenue line:

Dear Miss Snark,

I love your blog!

Unfortunately, there is no definitive resource to go to for understanding your royalty statements. Over the years, with the assistance of the AAR, publishers have revised their statement formats to reveal information not previously obvious, such as reserves for returns, but the statements are still not easy to comprehend.

In response to the email you received from the children’s author regarding a statement that did not arithmetically calculate, this is not unusual. Most systems allow adjustments to be made and "forced" through in the royalty due column.

Since editors don’t usually get involved in the royalty statement generation area, they are not the people to go to for explanations, but I know how frustrating it is trying to get someone in the royalty department to explain. Agents don’t receive any better statements or information. This is definitely a red flag indicator that help is needed!

Whether agented or not, authors should have an understanding of their contracts. Look to see if an audit clause exists and if yes, does it have a limitation as to when a royalty statement becomes final.

Publishers realize that a request to review the books and records is the right of an author, and it has become the ordinary course of business to them. We have never had a situation where negative ramifications have resulted from an author invoking his/her right to audit.
Although many accountants have audit expertise, you need to have an advocate with publishing industry expertise to get to the bottom of the problems.

For the past 15 years Royalty Review LLC ( has been assisting authors, agents, attorneys and publishers in recovering royalties. We would be happy to converse (email me at Royalty@aol.com, phone 212-754-1984) with anyone in need of additional information.

Gail R. Gross
Managing Member

Royalty Review LLC

845 Third Avenue, Suite 1300

New York,. NY 10022

212-754-3352 (fax)



writtenwyrdd said...

Thanks for supplying this info, Miss Snark!

Anonymous said...

I thought it was just me being stupid.
I never understand US royalty statements I am just pathetically grateful when they send me money.

BitchySmurf said...

That's cool. I'm not an author. I'm a contract person but I always wondered how well these royalties I'm setting up actually get paid.

"Reasonable" reserve for returns always looks like it could be a problem.

I know when I started, it was very confusing for me to learn the system. I didn't know what the difference between net price, retail price and prevailing reciepts, and I was like, 'what are escalation levels?' So I can totally understand why this would be greek to authors!

Anonymous said...

Back in the day I was forced to declare bankruptcy. I had to take proof that my income was insufficient to pay the credit card debt my moron ex-spouse had run up. (Word to the wise--have your spouse have his/her OWN plastic and be responsible for the debt on it. The twerp I was chained to never could wrap his head around "credit" being a debt, not a gift card.)

Part of that proof was bringing my royalty statements for the last few years. The lawyers were under the impression that all writers make million dollar advances. (I wish.)

When they looked over the statements they asked, "What does all this mean?"

Just as confused, I sadly shook my head. "Nobody knows."

I did invite them to phone up the publishers to ask for a translation, but they quickly declined and granted the bankruptcy.

Anonymous said...

Wow. Helpful. I've printed that out and will save it in my file.

Ken Boy said...

It sounds as though these publishers' statements are kept vague in order to stop people asking too many questions. There is no other rational reason for keeping information from authors that would help them determine whether they've been paid accurately.

Or maybe they have Mickey Mouse management and have simply never updated their IT systems to allow the preparation of more informative statements.

Either way, troubling.

Anonymous said...

I have to wonder if there were no negative ramifications for the authors 6 months or a year down the road.

This firm you quote wouldn't be able to tell you that, nor would they.

anon 2

Anonymous said...

But, Miss Snark, don't you deal with the royalty statements for your clients? How do *you* handle them? Do you ask for audits regularly?