I have an offer from a small press and I have no agent. The publisher is a nice guy, I don't think he's trying to rip me off or anything but how do I know if what he says about the number of copies sold is right?
Ahhh...this is why you want your contract to have an audit clause.
The audit clause generally comes right after the clause about how they'll pay you. It needs to contain a couple things to give it some teeth.
1. Make sure it says "The Author or the Author's designated representative may examine the books" Unless you're a CPA you won't know how to audit anything.
2. The publisher will limit the number of times you can audit to once a year, ask for reasonable notice, and probably limit the audit to information about your book (not the company as a whole.) Those things are reasonable to agree to.
3. The cost of the audit falls to the Author. However, make sure you include language that says if there is a discrepancy of more than 5% to the author's disadvantage, the cost of the audit is borne by the Publisher.
4. And make sure that if there is ANY discrepancy to the author's disadvantage that the Publisher has to pay the sum due within a certain amount of time. I ask for 30 days, and I've settled for 60. What I do NOT agree to is "next royalty statement" because in some cases that's a year away.
Without the audit clause you have no way to verify royalty statements are accurate. Most publishers are not trying to lie/cheat/steal or any other kind of chicanery. In most cases small publishers are people doing a LOT of jobs, and numbers and bookkeeping isn't one of the jobs they trained for.
We find a lot of errors on royalty statements but we rarely need to audit. Most of the time, you can find the mistakes yourself because they're things like a royalty rate is wrong, a credit wasn't properly recorded, or the reserve for returns is too high.