From agent Janet Kobobel Grant at Books & Such:
Literary agencies handle authors’ advance payments and royalty payments one of two ways:
1. The money is split–generally 85% to you, 15% to your agent–at the publishing house.
2. One hundred percent of the money is sent to the agency, where it is split, and the author’s sum is sent to him or her.
From the outset of our agency’s existence, we selected option #2. If your agent isn’t doing this for you, he or she is taking the easy way out of providing you a service.
By having the money sent to the agency, that agency will:
- Know that the money was sent to you. If the agency receives only its portion, it doesn’t know if you got yours. Since the bulk of the funds are the author’s, a publisher that’s having trouble finding the funds to pay could easily send the 15% to the agent but not the 85% to the author. That agent would assume the rest had been sent to the author.
- Check that the amount sent was correct. Recently a client’s advance payment was sent to our office. But the publisher had failed to send the right amount. Instead, the publisher sent what they initially offered for the book not the increased amount I had negotiated. In all likelihood, someone in accounting looked at paperwork that indicated the initial amount offered but failed to check the contract, which stated the increased amount. If the author’s money hadn’t been sent to me, it would have taken me some time to figure out why the agency’s portion was incorrect. But with the entire sum presented in one check, the error was obvious and quickly spotted. And the author didn’t happily skip off to the bank to deposit an incorrect check.
- Double-check that royalty payments are correct. Reporting royalties and paying the correct amount is a complex business because the book is likely to be published in many formats, at varying discounts, with returns, reserves and licensed subsidiary rights added to the equation. I spend hours pouring over royalty statements to determine if the payment for a client is correct.. . . .
Agencies that set up a system in which they receive payment directly from the publisher don’t have the same incentives to check that all is being handled appropriately for the author. And it’s much harder to spot the problems, even if the agency looks for them.
Link to the rest at Books & Such and thanks to Robert for the tip.
Passive Guy was going to comment, but decided visitors to The Passive Voice could probably do a better job. He will just say he always advises his clients to insist on a split-check provision in their publishing contracts so they receive their royalties and a copy of their royalty statement directly from the publisher