Rose Hilliard, editor at St. Martin's Press, asked me to point out the difference between royalty rate and advance royalty. The royalty rate is based on sales of the book. The rate is generally the same with all publishers but there are exceptions.
The royalty advance is a percentage of what the publishers expect the author to earn in the first year, so they receive it in advance—that is, before they complete writing the book.
Most publishers pay half the royalty before writers finish the manuscript. They pay the second half if "the manuscript is deemed acceptable," as one contract reads and another contract says, "upon receipt of a satisfactorily edited manuscript." For new writers it means the publisher edits the manuscript before they pay out the second half.
A few publishers pay in thirds and the final payment comes out when they release the book.
Authors receive no additional checks until they have sold enough copies of the book to pay back the advance. If the book doesn't sell enough copies to pay back the advance, writers don't return the advance.
A group of editors with whom I spoke at a conference, estimated that only about 20 percent of books paid back their advances. (Don't worry, the publisher won't lose money.)
Advance royalty is what I call
a good-faith payment by publishers.