10 Rules for Money Management Indie Authors Should Follow

Money can sound like a boring or even taboo topic for artists and creatives. But it’s important to talk about money and personal finance especially during unprecedented times like now. Although the book market is actually seeing a rise in online readers, it’s important to stay on top of your business.

In this blog post, I include insights collected from over 20K authors using PublishDrive’s services to give you 10 best practices in money management straight from the indie community.

(Note: PublishDrive lets you easily distribute ebook, print-on-demand, and audiobook to thousands of online stores across the globe, your 1st title entirely free.)

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The basics of money management for authors

Before we get into the must-do’s, let’s talk money basics so that we’re on the same page — terms to know:

  • Revenue: Any income you earn to pay your bills
  • Expense: Any cost that you have to pay for
  • Cash in: Revenue credited to your bank account
  • Cash out: Expenses debited from your bank account
  • Cash flow: The difference between the available cash at the start of an accounting period to the end
  • Return on investment: Measures the gain or loss of the efforts/investments you made
  • Transaction fee: Money or credit scores transferred to your bank account
  • Grants: Any non-refundable financial support

Rule 1. Understand your revenue sources and potential expenses

Revenue for indie authors usually comes from book sales: digital and offline. If you have a strong author brand, you can sell merchandising or have some advertising revenue coming in. Most authors count on revenue from royalties, so it’s important to know all the details when it comes to actual book sales.

Expenses usually come from costs related to creating and marketing your book. Services for editing, designing, and illustrating your book can cost a lot of money. Expenses can shoot to the moon in any business if you are not conscious about your financials. Getting into a credit report and credit card debt is too easy, and definitely not the right thing to do during uncertain times.

Rule 2. Maximize your cash in, earn more royalties

When you’re selling books, it’s crucial to try to keep most of the royalties at the end of the day. This is how you can scale your business easier.

Traditional publishing is known for looking at royalty rates closely. So you, as an indie publisher, should do so too. Here are tricks on how you can maximize your royalties:

  • Look at how much you earn per store, per partner, or per format.

Always look at the numbers in contracts or public information to understand how much money you’ll make by selling one copy of your book. With PublishDrive, that info is collected publicly here.

  • Try to get 100% royalties earned in stores.

Many distributors charge a percentage of sales to run their business — that means less money for you! If possible, try to find partners who payout 100% royalties earned in stores. For instance, with PublishDrive, you keep all your royalties and get the same direct royalty payouts (in many cases even faster to your savings account).


  • Read your contract on payouts related to lower-priced books.

Some stores pay out fewer royalties if you price below $2.99, even for a promotion or permanently. Read your contract or financial notes with partners to understand how it works.

With PublishDrive, you can monetize promotions or lower-priced books better than going directly to stores or other partners. E.g. PublishDrive pays out 65-70% royalty rates for titles priced below $2.99 on Barnes & Noble or Kobo instead of the 40% direct rate.

Rule 3. Optimize your cash out, create a budget

Publishing books is not cheap, but you can still do it with a tight budget if you plan ahead. Read more about understanding what self-publishing costs are in this article, or use a budget calculator for publishing books here.

If your manuscript needs professional editing and formatting, that can easily cost a couple of thousands of dollars. Also, converting your titles to the right formats can take up to a couple of hundreds of dollars. You can instantly save money (and time!) by using our free ebook converter. Check out the DIY and cost-effective options for publishing a book in this article.

Rule 4. Price your time as an expense

Time is money, so weigh your time as an expense. You can create your own book cover or edit your own book, but the learning curve takes up time that you could spend writing instead.

Managing to sell your titles everywhere is also time-consuming. Even if you skip the learning curve, you may end up with limited options for selling your titles which instantly puts a cap on future book sales.

Rule 5. Choose partners who are transparent with their pricing

Transparency is key. Remember to review written information, agree on everything in writing, and take the necessary steps to get transparent about how much you will earn or how much you have to pay.

Do not fall into the “FREE” trap that often contains hidden costs. You do not want to end up receiving fewer royalties or paying extra money for additional costs. (See PublishDrive’s transparent pricing and royalty payouts for authors.)

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Rule 6. Invest in marketing wisely

When times are tough, many business owners often cut marketing budgets — true for many book marketers too. But how can you sustain your income without investing in any marketing?

Find more effective ways to promote your business with free tools, ‘cause they’re out there. With PublishDrive, you can get your title featured in stores or email newsletters and distribute free review copies. If you are on a tight budget, there are reasonable options like getting your book featured with Written Word Media.

Rule 7. Analyze return on investment

It’s easy to spend money on your book, but is is important that you understand when you have a profitable business. You can use Self-Publishing School’s book profit calculator to see how many books you need to sell to cover your costs. (Note: it works for Amazon only!)

Alway analyze the results of your marketing effort so you can understand whether it was the smartest way to spend your money. For that reason, create documentation where you can track how much money you spent and what value it brought in. The value should preferably be book sales or potential buyers like signups to your email newsletter.

Rule 8. Optimize your cash flow

Cash flow is super important during uncertain times. You need to have more money on your bank account than your monthly costs to have a profitable business.

Try to get your income faster and get your costs delayed. Luckily, PublishDrive does that by waiving over $3,000 payment thresholds from stores to make sure you receive your money way faster than if you would by selling directly to stores. Also, we credit payments way earlier than some stores directly.

Rule 9. Search for other income sources like grants

As the global economy has been suffering due to the pandemic situation, governments started to roll out economic relief or emergency funds and grants to support businesses, entrepreneurs, and employees. Creatives always had options for supportive grants, but now is the time to look at different options available for you. Read the summary from Authors Guild here.

Rule 10. Create your own process and ask for help if needed

Managing finances and being an independent author is challenging. Many authors find their own way to track sales like Karen Myers shares her own method here. You can always get extra support like financial advisors or an accountant to manage your finances and taxation more effectively.

You can use great tools to track your finances like Quickbooks. Overall, it’s all about creating your own process based on the rules above. If you need assistance with that, the resources and services are out there.

To recap, the top 10 rules to manage your finances as an indie author are:

  1. Understand your revenue sources and potential expenses
  2. Maximize your cash in, earn more royalties
  3. Optimize your cash out, create a budget
  4. Price your time as an expense
  5. Choose partners who are transparent with their pricing
  6. Invest in marketing wisely
  7. Analyze return on investment
  8. Optimize your cash flow
  9. Search for other income sources like grants.
  10. Create your own process and ask for help if needed

We know the world is looking different these days. But when it comes to publishing, PublishDrive is here to climb the mountain with you short and long term. Right now, we’re helping indies meet their financial goals by distributing ebook, POD, and audiobooks all over the globe in over 400 online stores and 240K digital libraries.

Have you published at least one book? Or planning to?

You can upload your 1st title for free on PublishDrive.

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