An interesting discussion is taking place at the Absolute Write forums about recent comments by Hugh Howey, author of Wool. Hugh is fairly confrontational and controversial. He’s said some things in the past concerning women that were vulgar. Because of that, some people won’t listen to a word he says. The discussion is here: http://www.absolutewrite.com/forums/showthread.php?t=283374. But see his point 13:

What Hugh Howey wrote:
13. Monthly payments and speedy sales data. Authors enjoy money and they enjoy metrics, and right now they have to wait too long for both. At New Harper Collins, we pay royalties every 30 days. And whatever sales data we have, you have. Simple as that. If self-published authors can have this, then our authors should have this. No more waiting six months to pay people. That’s history. No more wondering how your book is doing; you have access to all the data we can cull. Share your results in the Harper Collins Author forums.

One of the moderators at AW, Medievalist, responded to Howey’s point 13 as follows:

13. This one is really silly. Bookstores order books but don’t pay for them until they sell them. This is, if you think about, fair. It’s not their fault if a book doesn’t sell. Bookselling is a business run on credit, and it’s not likely to change any time soon.

Libraries generally have 90 days, though some distributors and publishers allow less. Publishers aren’t sitting on piles of money, hoarding royalties. There’s a reason they pay an advance you know, an advance that the author keeps even if the book doesn’t do well. Mind, the P & L from an experienced publisher is generally fairly solid, so that the publisher isn’t losing money on a book, but the idea is to make money for the publisher and the author. That way the author will do another book with the publisher, and that one too will make money, and increase the sales of the first book.

I don’t think I’ll respond again at Absolute Write [Edit: They have now locked that thread there], but will instead do so here, and provide a little context for discussion of this point 13.

I must respectfully disagree with you, Medievalist. Surely publishers and booksellers work on an accrual accounting basis, not cash. Revenue and profits are “booked” the moment an item is shipped or an invoice sent, not when payment is made. That’s the same as our engineering business. We send out an invoice for October’s work on Nov 10. The client doesn’t pay us for seventy-two days (the industry average), which will be January 22. But that invoice accrues as income, and the profits represented in that invoice accrue as profits, from the invoice date. So we pay taxes on that profit (it’s still assumed profit, not realized) in the current year when we send in quarterly taxes on Jan 15 even though the cash doesn’t get to us till a week later. If it turns out the client stiffs us the invoice, we delete it in two stages from the next year’s accruals.

Sales accrued and royalties paid based on accruals can be taken away and deducted from future royalties. That happened to me recently when B&N over-reported sales on one day, a day I sold three copies of one e-book and accrued $6.00 of royalties. B&N later corrected the over-reporting and deducted $4.00 from my accrued revenue. That’s the equivalent of a return. And I’ve had e-books returned at Amazon after the close of the month in which it was bought. The royalty on the return is easily deducted. It’s all a software thing, very easy to accomplish.

But even if it were as you say, and trade publishers are so unsophisticated with accounting in this modern era that they can’t provide monthly sales statements.

In January:
We shipped X books to Bookseller A
We shipped Y books to Bookseller B
We shipped Z books to Bookseller C
We had W returns from prior shipments.

To fail to do even this small gesture, which will allow writers to judge the effectiveness of whatever promotion they might be involved in, is inexcusable. Yes, perhaps publishers aren’t set up to do that right now, but they surely have computerized records of what’s been shipped. If it’s been shipped it’s been billed. If it’s been billed then royalties are accrued. If you want to delay royalties until you’re certain of the returns situation, I could buy that. But give writers all the data you have. It’s their book. It’s not a trade secret.

So, that’s the end of my rant. Time to get back to work.