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Pre-production can be a thrilling time. All the pieces are falling into place to create something fresh and exciting. For a production accountant, it’s a critical period in which you’re helping to set the project up for success by ensuring a smooth accounting workflow.
Since project prep involves many tasks, it can be useful to review the key actions involved when you start a new project. Whether you’re a seasoned professional looking for a refresher or new to the field and getting ready to nail your first gig, this guide will walk you through the essential accounting prep steps.
Keep in mind, the following steps are not necessarily in chronological order. Many will be done concurrently. And of course, your prep will vary based on your production location, type, and budget.
One of your first accounting prep tasks after joining a project is to request the show’s budget and schedule.
Once your line producer delivers these, you’ll review the budget for any errors, oversights, or inconsistencies.
Though it’s typically the line producer’s responsibility to develop the initial budget, your review and technical feedback as a production accountant are critical. As with any complex document, the budget benefits from a second pair of skilled eyes to catch any issues the original creator might have missed.
One review strategy is to start with a bird's-eye view read of the budget. Are the big picture pieces lining up? Are the provided schedule and budget consistent with one another? Are there any obvious gaps?
For example, say the schedule has the cast and crew shooting on location for 10 days, but the budget only reflects accommodation for the 10 working days and not the one required off day needed. This would be an inconsistency you’d want to point out to your line producer.
After your big-picture read, you can get into the nitty-gritty. Go line by line and make sure everything looks correct. For example, if a film synopsis implies that the film will call for buckets of practical blood in every scene, and the “blood” line item in the budget is only $10, you’ll want to highlight this potential budget gap.
Your third pass at the budget can be a math check. Are the fringe costs applied correctly to their appropriate line items? Does the total budget number reflect all the line items? Help your line producer (and your production) by double-checking that the numbers add up.
If you’re ever in a situation where the line producer refuses to share the budget, or you’re given multiple budgets without proper explanation, consider that a red flag. This could be an indication that funding has yet to be secured or that the project scope hasn’t yet been defined.
Give thought to the balance sheet accounts you’ll need at the start of the project. Carefully consider how you’ll categorize the project’s assets, liabilities, and equity.
The details of how you set up the accounts will depend on the project scope and your own working style. Generally, it’s a good practice to create a separate account for each person handling petty cash or a float to help ensure optimal clarity and accountability throughout the production.
You’ll need to confirm that a project has been fully funded in order to avoid serious headaches down the road.
First, get details on who is funding the project. This could include private investors, a major or indie studio, crowdfunding, gap financiers, tax incentives, sponsorships, pre-sales, film commissions, or a combination of funders.
You’ll also need to know when the money will be received. Funding is typically received in increments, so be sure to get exact dates. Keep in mind that in some cases, like most state tax incentive programs, the money won’t be received until after production, which will have to be considered in the cash flow forecast (more on that later).
Finally, get clear on whether the funders have any stipulations that the production must abide by in order to receive the funding, and be aware of any milestones involved. For example, say Adidas is acting as a sponsor in exchange for their product being prominently featured for at least 30 total seconds of screen time. They may ask to see a final script, initial footage, and a rough and final cut.
Some common examples of funding plan headaches to be on the lookout for? The production might not have a completed funding plan–in other words, the production might still be in the process of securing funding. There could be issues with outside entities like a bonding company. There might even be fraudulent behavior by the producers, including embezzlement or misrepresentation.
As you confirm the project’s funding plan, the producers should be transparent and clear with you. Even if a project is still in the process of securing funding, or has hit a financing issue, you as the production accountant should never be kept in the dark. Producers who are unwilling to answer direct questions about the funding source are a major red flag.
In most cases, the lead production accountant will be tasked with choosing the payroll company.
When it comes to choosing a payroll company, Wrapbook is a great option to consider. Our One Platform solution has streamlined tools to save your team time in every aspect of accounting, from production payroll to cost tracking to reporting and more.
In fact, Wrapbook client London Alley reported a 50% time savings with Wrapbook, while client Open Range shared a 25% cost reduction after choosing Wrapbook as their payroll company.
If you’re curious whether Wrapbook is the right fit for your project, just reach out to our team.
The bottom line? Choosing the right payroll company is a vital accounting prep step in setting your team up for project success.
Every payroll, purchase order, invoice, and expense—all in one place.
To mitigate financial risk and ensure compliance, you’ll need to make sure your Certificates of Insurance (COIs) are in place before production. To do this, you’ll reach out to your production’s insurance providers to verify coverage and obtain COIs.
This task also includes reading the fine print, like terms and conditions, and ensuring that your insurance policies cover your production’s unique needs.
Before and during production, you'll need to organize documentation for various types of production insurance, which may include general liability, workers' compensation, equipment insurance, and errors and omissions insurance.
Depending on the size and scope of your production, your line producer might do the actual procurement of COIs. However, you’ll still be responsible for requesting the documentation from your line producer, as well as making sure the costs and coverage are in line with your production needs.
You’ll need to create a cash flow forecast in order to project income and expense over the course of production.
Make a cash flow forecast for the entire show or film by breaking it out week to week. Your familiarity with the funding plan, and in particular the funding schedule, is key to making an accurate cash flow forecast to guarantee the production will have enough funds from week to week.
If you identify a projected cash shortfall at some point in the production schedule, you can work with your producer to make a plan to cover it, like requesting an adjusted funding schedule or securing a bridge loan.
Need help getting started with your cash flow forecast? Download Wrapbook’s free cash flow template here.
Your relationship with your producers, and particularly with your line producer, are central to the success of a project. And since communication is the key to good working relationships, clarifying communication channels early on is a noteworthy accounting prep step.
Email and text are the most typical communication channels. Slack is also popular. All of these text-based communication channels are helpful for record-keeping. They’re also notable for not being as interruptive as phone calls.
Productions often provide production accounting teams with virtual phone systems, so that you can keep your personal number private.
Some production accountants also create separate email accounts for each project they work on, in order to keep personal and work email separate.
Union involvement in a project has implications for everything from budget to payroll to schedule.
You’ll need to identify which unions are involved in your project, and find out whether the production is signatory to those unions. Ask for signed contracts for all union-related agreements.
Your union compliance monitoring starts in pre-production, so be sure your record-keeping is immaculate from the start. Review the signed contracts to make sure your department’s plans are in alignment with current union regulations for your production’s location.
Finally, determine whether escrows will be needed and on which schedules. For example, if production is required to contribute to SAG-AFTRA’s health and pension fund for its union actors, an escrow account may be needed to hold the funds until they can be properly distributed.
When you join a project, you’ll have a whole host of questions for your line producer and extended team. While you should have an open communication channel to ask them questions as they arise, it can boost efficiency to gather your initial questions into one place, and ask them at the same time.
Here’s a list of questions to get you started as you go through your accounting prep steps:
Most production accountants agree: digital paperwork is so much more efficient and secure than the physical paperwork of the past.
An essential accounting prep step is creating a plan for paperwork management. Scan any physical documents, and maintain all your paperwork in a single digital space.
This is helpful in the short-term, as you’ll be quicker in pulling numbers or creating reports with all the documents at your fingertips. But it’s also helpful for your colleagues in the long-term, particularly if you move on from the project.
If others on the team prefer a different document storage platform from the one you’ve established, be prepared to own the process of migrating all documents over to that central space. You don’t want to be frantically searching for documents in multiple digital spaces when you’re preparing a report or managing compliance.
At some point in your accounting prep, you’ll want to compile a crew spreadsheet. This spreadsheet should include all crew personnel, and can include information like:
This helpful tool will likely be referenced over and over again during production. It enables you and your team to quickly see who gets paid each week, and is also a place to record any other important crew notes.
Proper onboarding is one of the most crucial accounting prep steps. You want to make it as easy as possible for new hires to get their start work filled out both correctly and on time.
Your digital paperwork organization will also really come in handy here, as you receive documents for each crew member who joins the team.
Wrapbook’s built-in onboarding tools help simplify this step, as you can create startwork, hire team members, and track onboarding status all in one place. Many cast and crew members will already have a Wrapbook profile from previous projects. The ones who don’t can easily create one, thanks to the user-friendly interface. Plus, all signatures are digital and you can send email reminders with a click.
Read all these steps and raring to implement them on a new project? Book that next gig with The List. The List is the industry’s premier job board for production accountants.
Founded by industry leader Emily Rice in 2005 and now hosted by Wrapbook, The List is searchable, subscribable, and trusted by job seekers and posters alike.
For early access to job postings, you can join Room Tone, an online community just for production accounting and finance professionals. With Room Tone’s Slack community, you can network with peers, be the first to learn about industry meetups and events, and swap production accounting tips and tricks.
We hope you feel prepared to dive into your next project’s accounting prep with confidence. Working through these steps will help you lay the groundwork for a seamless production process.
If you have questions on how Wrapbook can help with any of these steps, including onboarding, union compliance, insurance, and payroll, please contact our team for a chat.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.
Shaudi is a Seattle-based musician, theatre artist, writer and social media marketing specialist. She holds degrees from Berklee College of Music and the University of Washington School of Drama.
