An advance is exactly what it sounds like, a payment in advance of you actually earning any money. Basically, there are times when a publishing house may want to publish a certain person’s book. Perhaps they were famous. Perhaps they had a unique experience that everyone would want to read about. In that case, the publishers are so interested in getting the exclusive rights to that book that they are willing to offer the author advance money. This idea behind this is that the author will take the advance money to pay for their living expenses for a month or two, while they hole up somewhere (a hotel, a cabin, etc) and do the actual writing of the book (…or even better, doing some talking with a ghostwriter who is holed up with you and does the actual writing.) After a couple of months the book is finished. The publisher get it out and the royalties come pouring in. Everyone wins.
So why doesn’t this seem to happen so often anymore? Quite frankly, there were some issues with the system. First off, some of the publishers found out that giving an advance to someone doesn’t always get you a book. One publishing house lamented that they offered an individual $10,000 as an advance for what they thought would be a great book. However, the author produced a work that was extremely short and disappointing. The pushing house tried to get the author to rewrite it, but he wouldn’t – unless he got an additional $10,000. They didn’t go for it, and the book was never printed.
Secondly, some authors don’t seem to understand that the advance is not a salary or payment for writing the book. It is a loan drawn against the royalties that would eventually be due. Suppose that an author (let’s call him Bob) gets an advance of $10,000 for his book on dog breeds of North America in January. The publisher get the manuscript that Bob wrote 2 months later and every one is happy. The book is published on June 1, and the royalties start to come in. Bob gets excited to get his first royalty check, but it never comes. After 3 months he called the company. The publishing house tells him, “Well, so far you have earned $600 in royalties, but your advance was for $10,000, so you still owe us $9,400 before you will get a royalty check.”
Bob’s shock is evident. He “owes” the publishing company $9,400?? How did that happen? He didn’t understand that the advance was a loan that would be paid first before he got to receive any more royalty payments. He though it was payment for writing the book, and he spend it already.
One year passes for our author. At the end of that time, the publishing company decides to stop promoting the book. (Most profits are made in the first year.) They send Bob a ‘settlement’ statement, which noted that Bob had earned royalties of $8,750 for the year, and he needed to pay back $1,250 that he was ‘overpaid’ in the advance. Ouch.
This was a successful book. It made the author $8,750. So why did he end up feeling like it was a failure and he owed more money? It was because he was paid “in advance” of the royalties coming in.
Does this happen in every case? Certainly not. The terms of the advance – including whether you will need to pay it back in the event that you don’t reach that amount in sales – are all shrouded in fine print. Another reason to deal with a reputable company and understand the agreement well before agreeing to move forward!
No one can predict the future and no one knows which books will sell. An advance can be a helpful thing if it get the author enough time to complete the writing, but it comes at the risk of robbing them of the joy afterward of getting royalties that come in when their book is published. McKinney Publishing has decided not to offer advance payments at this time. We would like our authors to have the full joy at the right time, when the work is completed and the royalties come in.