Your contract will usually specify instalments for payment. Typically, these will be: on signature of the contract (and possibly delivery of a synopsis and/or sample); on delivery or acceptance of the manuscript; on passing of colour proofs or on publication. We'll come back to the iniquities of the 'on publication' tranche another time. Then there are royalties, but that's a different system. This is about flat fees and advances - payments of a fixed amount at a fixed time.
When one of these instalment dates arrives, you can start anticipating the money. But don't spend it in advance. That way lies ruin. First you need to send an invoice. This sets out:
- your own name and address
- the publisher's name and address
- the date (or 'tax point' as it's known in TaxAccountantSpeak)
- the amount they owe you (important detail)
- what the invoice is for (eg 'on signature payment for The Armadillo Harvest' or 'first advance payment on Do Onions Jump?')
- the contract number (if there is one) or name of your contact at the publisher
- your own reference number (you should number all invoices and keep a record of which number relates to which invoice)
- the amount of VAT, if you are VAT registered.
At the bottom of the invoice, specify your payment terms - eg '30 days'. If you are VAT registered and/or a limited company you will need to put your VAT/company registration details. If the publisher can pay money directly into your bank account, give your bank account details on the invoice.
But that's all standard stuff and you are probably doing it anyway. Now, thinking ahead to when they decide to sit on your invoice for months, you need to pave the way for getting compensation for their tardiness. Add a line to the bottom of the invoice to say that if they don't pay you promptly you will be charging them interest and a late payment penalty. There is a law that lets you do this (in the UK). It is the Late Payment of Commercial Debts (Interest) Act 1998 and it was amended in 2002 to incorporate parts of European Directive 2000/35/EC. There's more information about it here.
If the publisher does not pay you on time, you will be able to charge interest from the day the money became overdue (so you needed that bit about payment terms). You can also charge a penalty and charge them for any costs to recover the debt (such as small claims court charges, which we'll look at another time). How much you can charge as compensation for late payment depends on the size of the debt. If it is up to £1,000, you can charge £40. If it is £1,000-£10,000 you can charge £70, and if it is over £10,000 you can charge £100.
This means that although it is more aggro to separate your invoices you should do so if there is any chance the publisher will pay you late. If they are late paying two invoices of £200, you can claim £80 compensation, but if they are late paying one invoice of £400 you can only claim £40 compensation. Even if you send the invoices for stages 1 and 2 together (as I often do) make them separate invoices with different invoice numbers so that you can pursue them separately later.
Send the invoice and keep a copy of it. (You may be able to email it - ask your editor.) If you are feeling particularly efficient, you could send a statement at the end of the month showing how much they owe you, listing the invoices you have sent, the total amount each is for and when the payment is due. This is a useful prompt to the accounts department but they don't expect it from writers. I have only had one publisher ever grumble that I didn't send a statement and that was just an excuse because they didn't want to pay.
When the payment date comes, see if they pay you. Be optimistic, they might! I have some publishers who always pay promptly - and some who always pay late. If after a week or so you don't have the money, send a polite email or make a polite call. It may be an oversight, or they may only pay at the end of a month (that's common - you can argue about it or live with it). They may give you excuses. If so, you are about to start on the lengthy process of Making the Buggers Pay. Don't worry, you'll get the money in the end.
Coming next: Making the Buggers Pay