Pub Rants

A Tale Of Reimbursed Expenses

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STATUS: This week has been about meeting with editors and my authors who have come to town so no “this is what editors are looking for” stories to regale you with. Although I did have coffee with a children’s editor who is looking for anything multicultural. What a refreshing change as I love multicultural stories as well. And rumor has it that Grand Central is going to be starting a Latino/Latina line over there.

What’s playing on the iPod right now? SELF CONTROL by Laura Brannigan

I’m not sure why people think that agenting is a way to get rich quick.

Snort. I can barely type that with a straight face but there seems to be this misperception.

I opened my own agency in August of 2002. I had a small business loan and a five-year plan in place when I embarked on what is a risky proposition. (Actually, starting any small business is risky not just agenting).

When I launched, I truly believed it would take 5 years for the agency to be profitable (and if it weren’t by then, I was in trouble). I hit profitable (as in not operating in the red—salary plus all expenses) in year three by a slim margin. Still, I was quite proud. I was definitely ahead of schedule.

So in those early years, I tracked reimbursable expenses (such as photocopies, postage, the basic stuff) and was reimbursed by the client. But here’s the kicker. The reimbursement ALWAYS happened after the sale of the project to a publisher. If the project didn’t sell, I ate the cost. I repeat. The author was not responsible for anything if the project didn’t sell. Was not recuperating those costs hard to swing in those early years? You betcha but I was unwilling to do otherwise despite my red bottom line.

I have heard of perfectly legitimate agencies (with trackable sales) billing their clients for reimbursable costs at the end of each year regardless of whether a project has sold or not. It’s not against AAR regulations. It’s certainly not sketchy per se but for me personally, I don’t agree with that practice.

For me, the billing for “costs” before any sale has the potential of being abused by agents and agencies that are either ineffectual or operating pretty close to the margin of actually not being legitimate. For my agency, I wanted to make sure the boundaries where absolutely clear.

Now I’m in year five and enjoying solid success, so what did I decide to do (and I actually did this two Januaries ago when I was becoming profitable in year three). I did away with reimbursed expenses.

Yep, you heard that right. I don’t track expenses and expect the client to reimburse—before or after a sale now. The agency foots the bill as the cost of doing business.

There are two exceptions though. The agency does track costs associated with International postage or wire transfers (as those are unusual) and we also do track book purchases used in selling subsidiary rights (because that can get expensive very quickly). We always email the clients first to find out if they want to provide the copies and if not, to check if the cost incurred is okay with them before we proceed.

Perhaps we’re crazy but I find that ultimately it’s not worth the time and effort to track it.

Why do I bring this up? Well, I haven’t talked about fees or reimbursable costs in a long time and I think it’s wise to keep talking about this issue. As I mentioned, legitimate agencies might have this practice and as long as they have a long list of documented sales (where it’s obvious their reputation is impeccable), it’s probably not a worry.

However, I would ALWAYS approach it with caution as there are many marginal agents/agencies that are happy to be reimbursed for submission expenses but don’t have the corresponding sales. And if you are going to be billed for those expenses, it should ALWAYS be accompanied and documented by receipts.

20 Responses

  1. Anonymous said:

    Thanks for talking about this Kristin. It’s another question that author’s should always ask the agent before signing with them.
    Good tips, as always.

  2. Linnea said:

    H-m-m. I’ve never run across this with any professionals I’ve dealt with other than lawyers and they bill for EVERYTHING.

  3. Anonymous said:

    I knew someone would mention lawyers in their comment. For some reason, people seem to think attorneys should work for free while everyone else gets paid for their work… not quite sure how you work that one out.

    Kristin, you should charge for copies and things if the work has been published. It should be part of your contingency fee. Everyone else gets paid for it. It’s not mean to ask for reimbursement; it’s the business standard.

  4. Kelly Kirch said:

    I appreciate the frank discussion. My agent has billed and been paid for local mailings within the same city, and courier services. It came to $72. This agent also shredded my first manuscript because of 8 punctuation errors in 418 pages. Yes, 8. I wanted to reprint the 8 pages with corrections and have them tucked into place. But it was too late. I then had to resend the entire manuscript times 10 copies a second time. That would be $180 x 2with print and shipping costs.

    It cost me a fortune and other than the fact that this agent loves my work, hasn’t initiated contact with me. In fact I have to remind her who I am, what project it is, and who she sent submissions to. For someone who works for me, does this seem odd to anyone else? And considering that I live on limited income where each dollar is precious, and the agent knows this, does it seem like maybe there’s a problem here?

    In your professional opinion, what should I expect? And before you ask, no I won’t be renewing the contract with the agency.

  5. karen wester newton said:

    Actually, with a small agency, I can see where it makes economic sense NOT to charge clients for copying and mailing, at least not if it takes a fair amount of time to track it. If that time constraint either eats into your agenting time, or requires you to hire help, it becomes not worth it.

  6. Ghost Girl said:

    Thanks for sharing this, Kristin! You hear horror stories about lesser-known agencies who end up costing the author a bundle and getting no results.

    What you have described in the beginning of your enterprise is more than reasonable and the sort of attitude I would hope to find in an agent. And your 3rd year policy is fabulous. That really expresses a faith both in your client’s writing and in your own abilities as an agent.

    I just might be shopping for an agent soon. You always give solid advice and fabulous reality slaps. Thanks!

  7. Anonymous said:

    Kelly, yeah, it is not the way things ought to be. You should expect the AGENT to keep track of where she’s sent the MS. And although you can initiate contact whenever you have a concern, you shouldn’t have to remind her who you are. IMO.

    I was once the client of an agent who was nearing the end of her agent-season. I had to ask her for everything. I felt as though I were very much the junior member in the partnership, and I didn’t like this position. When she dumped me 2 weeks before a major conference, part of me was glad.

    I’m now on the agent hunt once more. Too bad Kristin N doesn’t handle what I write!

  8. Anonymous said:

    My feeling is that you show great goodwill in not billing out these costs. Thank you.

  9. Anonymous said:

    I read on one authors website that she had to make numerous printouts of her manuscript (even had to go out and buy a new printer, mid printing cause it died on her) then had to mail them out to her agent.

    It actually made me feel unease reading that.

    The client making all the copies to be sent to editors? Doesn’t most agencies have maybe a place they regularly use to get a discount? And if so, couldn’t a client then send the money for the printouts, instead of having to pay for shipping and handling too?

    Mind you, this author got a contract through this agent but, it just felt like this author was doing extra foot work to me.

    Is this standard practice?

  10. Anonymous said:

    Does it seem petty to ask up front an agent who wants to sign you if you have to cover the costs up front for copies to editors even if the manuscript didn’t sell?

  11. Misque Writer said:

    If it is expensive for an author to pay for copying and mailing costs, consider that the agent has to pay for the costs of a dozen plus authors. It would be quite gracious not to charge for that.

  12. Chumplet said:

    I would expect many of these expenses to be tax deductible, anyway. Even for the writer.

    If an author gets $10 in royalties, can they now deduct paper, printer ink and postage expenses in that tax year?

  13. Kelly Kirch said:

    As Anonymous said, I am in a similar situation with printing out multiple copies and mailing them to the agent for disbursement. Then they were shredded and I had to do it over again. She never asked me about shredding them and I was willing to repair whatever needed repairing.

    I’m definitely getting out of this situation. But as I already have seven books in two pen names coming out this year with more possible, I’m not sure I REQUIRE and agent. Everything I write is picked up and I’m very grateful for it. However the agent has had no part in my sales as these were all done directly by me.

    Maybe having an agent isn’t worth it. I don’t know at this point. Epubs have come a long way and mine in particular. But there’s something about that lofty NY pub goal, isn’t there?

  14. Eileen said:

    Anon- I don’t think it is petty at all to have clarity on what expenses each of you (writer and agent) are expected to take on and when. Better to know up front what are the expectations.

    I can’t speak for everyone- but having an agent in my corner has made a huge difference in both the deals negotiated as well as areas such as foreign sales and film rights. I’m very grateful for her input into my career. I suspect I would feel different if I was making the sales on my own as Kelly mentioned. I think it would be fair to ask in that situation what plan the agent has to move your career in the direction you want to go and how she/he can help facilitate that progress.

  15. Laurie said:

    Thanks for this insight. This is another of those details most writers don’t think about. When these charges are billed (or if they are graciously absorbed) by an agent is important to know, because it could create a real hardship for some if such costs are billed prior to a sale. This is good education and a talking point for those seeking representation.

  16. Anonymous said:

    I know of several agents at reputable agencies (ones Kristin even links to on her blog) who ask for the author to print out copies and ship them to the agent for submission to editors. I was surprised by this at first, but the more often I hear it, the more I wonder if it’s some-what standard.

    Also, I think my agent is worth her weight in gold. My advance was about 10x what it would have been had I tried to go it alone. She earned that advance and then some!!

  17. Anonymous said:

    Very early on I had an agent who required me to send eight copies of the finished book AND pay for all shipping costs, etc… which totaled about 300 dollars or so. They submitted to exactly three editors and then told me it they’d exhuasted their contacts and it would’t sell.

    *yes they were a reputable agency, had prior sales, and a large-ish client list.

    I parted ways with them, wiser and poorer. They are now out of business. Never again. My current agent charges nothing. Nada. Zip.

  18. Tessa Radley said:

    Congratulations, Kristin, on your stellar success!

    I live outside the US and my agent is in New York. She doesn’t charge me for copying and mailing to my publisher. The only charges relate to wire transfers. And I deduct those on my tax return.

    I think it’s a very valuable exercise for authors to have some idea of what they cost an agent–and what an agent would earn if the agreement wasn’t one of agency.

    My background is law. I was raised to think and bill in 10 minute increments and to make certain that I did at least 5 billable hours work a day. It’s become a mindset. So I’ve kept a rough tracking of the time my agent has spent with me (physically, on calls, in emails–and, believe me, I’m low maintenance), the time I estimate she spends sending out my proposals and following them up, and posting contracts to me etc. If I attach that to an hourly rate that I think a professional like an agent should earn, it gives me some idea of the value of the work she’s done. To that I add the international postage that I know she pays–I receive the mailers that my contracts come in, and I can also approximate local postal charges. When I total this all up, I have a fairly good idea of whether my agent is in the red or black with me. It’s an interesting exercise to do! And let’s just say, I pay 15% with delight. Yes, hopefully the balance does change with time, but then one must remember that those early days were costly to the agent.

    And on the do-you-need-an-agent-for-category-romance question? Given that my agent sold my first book on 2 Feb 2006 and at Feb 2008 I have 6 books in print, I can only say I would never have achieved that by myself.

    And on to the iPod. Kristin, it’s a long time since I’ve heard Laura Brannigan–love that Irish voice…


  19. Maureen McGowan said:

    I love how honest and open you are about all this.

    I used to work for one of the big accounting firms… and we used to joke that we needed to type in a client code in order to get sheets of toilet paper in the office bathroom. 😉