How to Obtain & Manage Petty Cash For a Commercial Production
When planning an upcoming commercial shoot, it’s not unlikely that you’ll face some sort of last minute expenses.
Lighting replacements, transportation for talent, additional prop supplies needed on set, and meals for cast and crew are just a few small, everyday expenses that can come about during production.
Quick purchases are made seamlessly with access to petty cash, but how easy is it to obtain it? And once you have it, how do you properly manage it?
Depending on your organization’s infrastructure, obtaining petty cash may not be quick or easy. For many companies, accessing petty cash can take up to 30 business days. But in the quick-world of commercial production, this is a big problem because without quick access to funds, you could face production delays.
It doesn’t have to be this way– even if you have in-house financial support. There are options to help you keep your production running on-time and on-budget with quick access to petty cash when you need it. Below, we’re explaining how to quickly obtain funds when you need them and our top tips for properly managing petty cash for smooth production accounting.
What Is Petty Cash?
Petty cash, also referred to as petty expenses, refers to an amount of cash at hand that is used for paying small, everyday production expenses. Petty cash can be given in any denomination, in some cases petty cash is never used but it is more common to carry a float for the duration of a project and get it topped up as needed. Compared to cash on hand, petty cash gives every penny a home that should be accurately accounted for by production.
Petty cash allows your production support team to properly monitor, organize and distribute funds efficiently.
Petty cash can be used for small onset expenditures for example repair materials, actor props or other small goods and services. However, there are a few items that petty cash cannot be used for, including:
Motor money
Rentals
Locations
Labor of any kind
Rideshare
Parking tickets
Gift cards
Prescription drugs
Alcohol
Cigarettes, tobacco or smoking products.
Gas for vehicles not specified under policy.
Prepaid gas
Credit card or debit card receipts.
How To Get Petty Cash For Your Production
Petty cash is organized and distributed by production supervisors through a set policy established among producers before production even begins. Attaining petty cash for your next commercial film will require a few important steps which we will further breakdown and define.
Determine the amount of petty cash required
The first order of business is determining the amount of petty cash your production film requires. This will vary on a few factors including:
The size of production. The larger the production, the larger amount of funds you should consider adding for petty cash.
Number of location shoots. Each location shoot should have their own amount of issued petty cash.
Duration of shoot. The longer the duration of the shoot, the more funds you will most likely need in petty cash for your production.
Detailed production budget. Having a detailed production budget allows producers to get a better idea of how much funds to allocate for petty cash.
For example, a small production, with one location, and a one-day shoot may only need a few hundred dollars in petty cash. However, a large production, with multiple locations, and a week-long shoot may need several thousand dollars in petty cash.
Taking these factors in mind when determining the amount of petty cash your production will need will allow you to have a more accurate production budget.
Create a Petty Cash Policy
One key feature of petty cash is that it allows producers to control how it’s managed and used by cast and crew through a petty cash policy.
Petty cash policy covers several important components producers should take into consideration when deciding how petty cash is used during production, such as:
Designating a person to manage petty cash distribution. Either production supervisors or accountants through a third-party production support services.
Requiring petty cash receipts for all purchases. Credit card or debit card purchases are not proper proof of receipt. Ensure you only receive original receipts.
Establishing a set process for requesting petty cash. Implement a standardized request form, establish an approval hierarchy, maintain meticulous documentation, and set limitations on the amount of petty cash that can be requested.
Requiring floats throughout the process. Set clear limits on maximum petty cash distributions throughout production.
Keeping a petty cash float. This ensures there's always some cash available for minor, unplanned expenses.
Setting a clear and transparent petty cash policy for your production will allow your production support team to understand how to distribute petty cash effectively while ensuring your production stays within budget.
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Ensure petty cash is issued to a reputable crew member. In most cases, producers or production supervisors are the only members allowed to request petty cash.
Reconcile and record petty cash regularly. Reconciling petty cash means comparing the petty cash original budget to the amount of money recorded. This will help monitor how funds are being used and will ensure that the petty cash fund is always accurate.
Keep petty cash in a secure location. This will help to prevent theft or loss.
Update the petty cash policy as needed. This will help keep the policy up-to-date.
Establishing a strong and solid policy is an important aspect of petty cash for productions to ensure your budget is used as effectively as possible among your team.
3. Request and Receive Petty Cash
The availability for petty cash does not mean it is available or accessible to anyone. There is a process in place to ensure petty cash is being used by the designated members to purchase qualifying goods and services.
The steps to request petty cash is as follows:
Step 1: Send a request to your PM or the designated person in charge of distribution.
Either in person or through a written request form, members must request their petty cash float from their production manager or the designated person in charge of distributing petty cash.
When requesting petty cash you must define:
Who is requesting petty cash?
How much is the petty cash float? (The maximum amount one is approved to take out in petty cash anytime)
What date are they requesting the petty cash?
How is the petty cash going to be used?
These factors will help the designated person in charge to determine whether petty cash should be issued out to the member.
Step 2: Fill out a purchase order.
Once petty cash is approved and issued, members must then fill out a purchase order form before receiving petty cash. This leaves a paper trail for productions to know a member owes the production money for petty cash.
Members with petty cash must keep it separate from their own cash, and make sure their business and personal expenses don’t intermingle.
Step 3: Provide receipts.
When using petty cash to make purchases for goods and services. Always make sure to keep a record of your original receipts. These receipts are submitted back to production through an expense report.
Failure to provide proper receipts or proof of purchase with petty cash will leave members liable for those expenses.
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For a smooth and quick process with petty cash, we’ve listed some helpful tips that can make all the difference:
Keep original receipts. Pictures or copies of receipts are not an acceptable form of proof of purchase, only original receipts are valid.
Reconciling petty cash regularly. Reconciling petty cash regularly varies for every production but ensuring it is being monitored will help ensure it is being used efficiently and as needed.
Conclusion: Get Petty Cash Quickly For Your Upcoming Production
In conclusion, we see that petty cash is not such a petty matter. Petty cash plays an essential role during production that can make a big difference for the team on set and an even bigger difference between staying within your production’s budget or surpassing the total budget.
Getting petty cash for your upcoming commercial film will require your production to pass a lot of red tape within a short timeframe and will also require a lot of attention to detail to keep your records and receipts organized and accounted for at all times.
Here at CMS Productions, we can assist your upcoming production with petty cash and more with production support.
We have a talented team with experience to provide your company with our all in one production support services, including:
Opening vendor accounts and issuance of purchase orders
Invoices and disbursement management in connection with Shoot
Production payroll, including all payroll, worker’s compensation charges, employer payroll taxes and third party processing fees
Crew union signatory services
Banking and insurance services as required
Providing a credit card for the production
Production and general liability insurance management
Petty cash management
Accounting services upon completion of production (and during the production upon reasonable request)
With years of experience, we provide customized solutions for all your production needs. Contact us today to set up a consultation.
FAQ’s
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Petty cash varies per production. The larger the production with longer shoot durations with multiple locations will logically require a larger petty cash budget compared to a small production with a one day shoot with one location.
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Keeping receipts by taking pictures or asking for an extra copy will leave a paper trail helpful for productions to account for how petty cash was used.
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Petty cash can be used for everyday small expenses during production. How petty cash can be used will vary per production and specified under the petty cash policy.
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Some expenses are not allowed such as large costs going beyond petty cash distribution, expenses not related to business operations, expenses not properly accounted for due to lack of proof of purchase or expenses not authorized by production.
