Late Payments Cost Creators
on November 17th, 2009Creators pay big time when they screw up.
When creators deliver late, it can cost them their contracts. Everyone in the production chain on a book pays when creators screw the deadline pooch. As the schedule gets shoved back, people wait longer for jobs and payment, and schedules on other projects have to be rearranged – on creator and publisher end – to make up for delays. Deadlines push up against other deadlines, one project dominoes against the next. Contracts sometimes include financial penalties for late delivery.
However, in all the years I have been in publishing, I have only had one publisher pay interest on their late payments. The small amount due meant that I got about 50 cents in fees, but I was surprised to get the fee at all. I’ve been paid months or years late – or not at all – for jobs, and this year was the first time I have ever had a publisher pay their contractually obligated late payment interest fee.
While reviewing a royalty statement recently, I found one of my clients had made an error in calculation. They had been shorting me on all my payments for nearly a year. However, I did not review my previous statements carefully, so didn’t catch it sooner. The cumulative effect over one year’s worth of royalty payments shows the publisher owes me another $2,000. I was nervous about contacting the accountant to point this out, certain I must be mistaken myself. But within a half hour, his assistant called to politely admit that, yes, I had been shorted and the amount would be calculated back into my payments in the next accounting period.
Which means that even though I’ve been getting shorted on each statement over the last year, I will have to wait until the end of the next accounting quarter to get my extra $2,000. And, of course, I would love to have that money before Christmas, but probably won’t. I’d love to pay off the $600 I owe on my car repairs now, and the interest on the money I owe on VISA accumulates.
I won’t be getting a penny in late payment fees on those royalties. The company is not obligated to do so in this case, and the mistake was an honest one. But if you or I paid someone late for whatever reason, we pay through the nose in interest. When clients pay us late, we lose big time.
Almost every small press I ever worked for paid late, very very late, or not at all.
They seem to think not paying freelancers is an inconvenience, not a hardship. But the value of the money a client fails to pay his creditors shrinks with every minute that client doesn’t meet his obligations to them.
Every minute your money is not being used to pay off debt or is not being invested it is worth less than its face value.
Consider that some of these publisher debts go back years.
The average freelancer is probably carrying debt and paying interest on that debt. And the client makes no provision to pay late charges on any of the debt he says he may or may not pay sometime in the dim and distant future.
An unpaid debt of $1,000 is not an unpaid debt of $1,000. If the freelancer is carrying debt on credit cards with an average interest rate of 15%, that unpaid debt of $1,000 over the course of two years just cost an additional $347.35.
Consequently, for every $1,000 the client has not paid, the freelancers have lost that $347.35 in interest, and the face value of the $1,000 has dropped to $652.65. In only two years, the $1,000 has lost more than a third of its value.
Late paying clients aren’t an inconvenience, they literally drain the life right out of the freelancers they do not pay. A creator spends the hours of their life working to earn money just like anyone else does. Every minute you live costs money. Every minute you labor for which you are not paid has to be earned out somewhere else. The freelancer has to do double time to make up for deadbeats.
The time these freelancers could have spent working at McDonald’s would have been more profitable for them than working for most small press publishers. One month working for McDonald’s would have brought in over $600 and would have come with benefits.
Being published isn’t good enough. There are simply too many bottom feeders out there who take art and money, and who never come out with the finished work. And even when they do, the books usually bomb in the marketplace to the benefit of no one. It is not worth it to work for bad publishers to get a “big break”.
And to be perfectly frank, getting a clause in your contract which provides late payment penalties is easy. Collecting on those penalties from a publisher who pays you late is virtually impossible.
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This post was originally written in response to the indifference Tight Lip Publishing exhibited toward freelancers to whom the company owes vast sums of money. To date, out of the tens of thousands of dollars owed, only one freelancer has been paid a portion of their fees. They received $100.
And as someone in the middle of the production & design chain, I can tell you that people who generate content and miss their deadlines earn a Very Special place in my heart.
I used to have a ‘Bastard of the Week’ whiteboard, similar to the Billboard top 50. On this whiteboard went the names of the guilty, along with their ranking, how many weeks they’d been there, and if they were on their way up or down. I would hide it in my office, and at the weekly staff meetings, I’d bring it out, and we’d all vote on who got a place. People who regularly blew their deadlines were consistently in the top 10 spots.
It’s so important to stay on schedule. Everyone understands that things happen, but if you’re consistently late, why on Earth do you expect anyone will want to work with you?
About 15 years ago, I was very sickly and kept blowing my deadlines. Naturally my editors were very upset. On the one hand, I felt very ill-used because I was not being late on purpose. On the other hand, books have to come out, and other people depend on me to do my job on time, too. If I don’t, everyone gets paid late.
One other thing about late payments: when I was doing a lot of small press work, clients almost never paid on time.
I’d be in the middle of a big project, after two months of work, I’d still not have been paid, and then my funds were ran out. So, I’d have to go and grab another job to make some quick bucks.
And this usually gave the small press schumucks the chance to blame the artist. “See, the artist ran off and did another job!” The small press conveniently neglected to mention that artists would wait 120 days or more to get paid even a portion of monies due. Between the time you began a job and the time you actually saw one penny, I’d wait at least 120 days.
Payment delays got so bad on “The Master of Rampling Gate” graphic novel, I had to hold the art hostage. Then I had to throw the project quality standards under a bus.
I think I waited five months for payment and had to get a lawyer to get it. And by then, I had had to rush to get it finished and the second half of the book just looked awful.
Late payments don’t just hurt production, they hurt the finished work. Artists can’t produce for months at a time for no pay. We are routinely expected to give months (or years) of interest-free loans to publishers. I’m just not willing to do it any more.
If I want to work on labors of love, well, that’s what A Distant Soil is for.
I would have been happy to do my best on some of the small press projects I did, but when it boiled down to a choice between creating a masterpiece for a deadbeat or keeping a roof over my head, I chose to keep the roof over my head.
Waiting five months? *stabstabstab*
Ah yes. Delays……
I’m working on this totally volunteer project for church – an Advent devotional – which, if we’re going to make ANY hard-copies before the beginning of Advent (a week and a half away) we need to do SOON…. And I am STILL waiting for two pieces from contributors, a full WEEK after the LATEST they were told we would need it. *sigh* At least it’s only two pieces, and I and the committee chair can double up on entries if necessary (we’ve each already written one a piece).
I would hate it if a so-called “paying gig” went this way, on either end of the equation.
One of my jobs was an “honorarium” job. IE: pennies for the work I did. I did blog about it on my blog. It was painful. It was torturous. I’m glad it ended.
@ VT: The company went under within a year.
About a year after that, I bought out the remaining inventory on the GN’s for $1 apiece, and sold at a tidy profit.
My only regret is that I did not find some way to do get some cash so I did not have to rush on that art. What is good is still good, and what is bad is godawful.