We distribute royalties to authors after we have been paid for the sales of their books by our wholesalers and retailers. Those payments vary but tend to be 90 days later. This means, for example, that we are paid for January sales at the beginning of April.
The first author royalty is paid at the end of the quarter that falls approximately six months following the release date. Subsequent royalties are paid quarterly in January, April, July, and October for author account balances of $25 or more. If less than $25 then the balance carries forward.
We hold 20% of author royalties for 8 months to cover books which may be returned to us from bookstores. On average, 20% of books are returned during the 8 months following their purchase by bookstores. (The industry average is 30%. We are fortunate to be closer to 20%.) Any amount held back which exceeds returns is paid to the author. If returns exceed the amount held back then the author reimburses for those, usually from future sales.