Publishing is an ever-evolving industry with unpredictable trends, fluctuating cashflows, and people that typically prefer working with words over numbers. But while words and stories are the heroes, it’s the numbers behind them that determine financial success.
“There’s a real magic behind the art of publishing,” says Keiran, Sales and Marketing Director at Affirm Press. “It’s a blend of intuition that comes from years of experience along with having the right numbers and data – and knowing what to do with them – to back your decisions”.
It’s something Keiran understands well as co-founder of Affirm Press, a Melbourne-based independent publisher that has grown to a multi-million-dollar business in just six years. Dedicated to publishing great Australian stories, big ideas, and the most engaging local and international authors, Affirm Press now manages hundreds of titles and has a firm grasp on their numbers.
But this wasn’t always the case.
“In the early days, I did all the numbers myself,” says Keiran. “In addition to sales and marketing, I managed contracts, paid royalties, and coded bills. As the business grew, it was clear that this wasn’t sustainable, so I began looking for outside help”.
An increasingly complex business model
As the business grew, so did the ways in which Affirm Press earned revenue. This included end-to-end publishing of their own books, distributing books from overseas, and selling across different formats.
“While I was able to manage this manually at the start, things became much more complex as our titles grew into the hundreds,” said Keiran. “It became wieldy and too hard to manage. It was taking too much time, and as with anything done manually, it was prone to error”.
The business turned to help from Slate Accounts to get their key financial processes in order.
Taking control of royalty payments
In the publishing world, authors are generally paid an advance to write their book, followed by regular royalty payments. While this initially sounds straightforward, it’s a complex process because each author has their own individual agreement with books sold across different formats. Keiran explored software solutions designed for royalty payments, but found they weren’t cost effective or a good fit for independent publishers.
The Slate Accounts team worked closely with Keiran to digitise the process using Microsoft Power BI. The solution has taken Keiran’s knowledge and translated it into a process and system. With access to insights whenever they need it, the business can better manage complex royalty calculations, payments, and accounting.
“It’s been a huge help with paying royalties and saves me weeks of admin time,” says Keiran. “It also helps us make better business decisions. We can track earnings and identify our most profitable books right down to the title level. It helps us decide what categories to pursue, how to best approach authors, and how to structure contracts”.
Improved stock accounting
The unique thing about the book publishing industry is that demand for book titles can change quickly, making tracking stock value difficult.
“Publishers with unrealistic stock valuations can get into trouble when it comes to borrowing and paying back money,” says Keiran. “It’s why we’re meticulous in tracking our stock provisions and cost of goods sold”.
With Slate Accounts, Affirm Press was able to move from a spreadsheet model to a solution that is tracked and consolidated in Xero, allowing management to:
- Get a more accurate idea of what is in stock.
- Track records and match back to the distributor.
- Identify slow moving stock.
- Determine cost of goods sold at a title level.
- Inform annual planning.
- Secure cash flow funding.
“Book sales follow a cyclical timeline, so we need access to working capital to cover us in those leaner months,” says Keiran. “Because we’re tracking stock so accurately and closely, it’s been easy for us to produce the numbers we need to show a lender and get the cash flow finance we need”.
Intel to make better business decisions and direct growth
By getting their accounts and financial processes in order, Affirm Press has been able to:
- Streamline financial processes, including payments of author royalties and managing stock.
- Make informed business decisions, particularly around author contracts, marketing activity, and strategic planning.
- Secure cash flow finance with accurate, timely reporting on their financial position.
Keiran has found several added benefits in working with a third party to manage their financial function.
“I really feel like it’s the best of both worlds,” he says.
“You’ve got someone who knows your business intimately, but who isn’t an employee of your business. So, there are no issues around the hours worked or managing employees. You can adjust resources according to business needs, and there’s also a great sharing of knowledge with ideas on different ways to run different processes”.
“There’s the assumption that when using a third party, they don’t really get to know your business,” says Keiran “But we’ve found the complete opposite with Slate Accounts. The team knows the ins and outs of our business, completely.”
Words of advice
Having grown a multi-million-dollar business in just six years, Keiran has learnt first-hand the importance of getting your numbers in order and having accessible, digestible analytics on hand.