Sunday, September 14, 2014

EIN, Anyone? The Road to Self or Indie Publishing Part 5

I breezed over some important information in my last blog because I got focused on formatting. Probably because this was my biggest bugaboo. And while it’s one of the cheaper parts of self-publishing to out source, if I couldn’t format my books, I’d have to pay someone every time I put out an e-book or needed one corrected. 

It hit me that I had jumped into formatting without fully explaining some steps in the process of setting up my publishing business. These steps are important because they help the indie publisher maintain a degree of personal privacy online.

First of all, I applied for an Employer Identification Number (EIN). These are really easy to get from the IRS via the Internet and once I got it there was no reason to splatter my social security number across the globe. 

Why an EIN?
Because all the distributors need a way to legally identify me for tax purposes. They require either a social security number or an EIN (or some equivalent if you’re from outside the USA). By using an EIN, the IRS knows it is me, but I didn’t have to use my social security number every time I set up an account with a distributor.

If you chose to take this route, you’ll need to have made some decisions before you can  complete the application. For example, you need to have chosen a company name if you plan to use one and what type of business you’re going to have. For example, a LLC or sole proprietorship, etc. I found the folks at the small business development center at a nearby university of invaluable aid in making that decision.

The application for an EIN is fairly simple to complete and you can always look over the form at the IRS before you fill it out. Plus, the process is fast and if the information is valid, the EIN number is issued immediately. Make hard copies and file them in a safe place for future reference.

Bank Account
I’m not any more willing to give strangers access to the family’s bank account than I am anxious to give them my social security number, but book distributors need access to a bank. How else am I going to get all that royalty money? 

Fortunately, one of my small publishers had already gone the direct deposit route with royalties and I had set up a separate account at a different facility. Namely, a credit union. I’m not acquainted with all the credit unions in the world, but the two I use are member owned and don’t charge fees for checking or savings accounts. So it doesn’t cost me anything to keep Saderra Publishing in a facility that doesn’t house the family account. 

Remember, I’m a control freak which means I’m going to all this trouble so I can distribute my books. As with anything else, there are people or companies who will offer to do this for a writer. Of course, they expect to be paid. And I’m pretty sure, they’ll need all your really personal information to set up the accounts for you! And while doing it yourself is a time suck, with each book I’ve downloaded into the various outlets, the process has become easier. And I’ve learned to have all my ducks in a line before I start the process. Something I’ll discuss later.

Before I could download an e-book into any distributor’s system, I had to establish an account with them. And before I established an account, I downloaded and printed and read ALL the agreements. Yes, this was yet another huge time suck, but these are legal agreements between me and the distributor. I’ve never signed a contract with a publisher without reading all the fine print, so why wouldn’t I do the same with a distributor?

Once I read and agreed to the various contracts, I applied for accounts. The distributors want the same basic information for their application forms: the company name, my street address, my EIN, the name and address of my bank as well as the account number and routing number. If you have the information together on one sheet, filling out the forms is easy.

It takes a few days to get the accounts open and it pays to return to the distributor and sign in to see if there are any problems. (Something to do on a regular basis with e-books, too.)

With accounts set up at the distributors, an EPUB converter program in my computer, and a manuscript ready for readers, I needed to concentrate on getting books ready and into distribution.

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