6 Signs You Need Production Accounting For Your Commercial
Producing a commercial is no picnic.
Commercial productions run on fast and complicated processes that require producers to handle a lot of moving pieces all at once. Aside from all the creative aspects of filming, there is also a long list of back office responsibilities that must be taken care of to ensure a smooth and successful production.
With the fast paced nature of filming commercials, it can be difficult for producers to effectively and accurately manage the financial aspects of their productions.
A solution for many producers is to hire a commercial production accounting service to avoid any financial hiccups along the way and focus on the actual production of the spot.
As a producer or production company owner you may be wondering, when is it a good idea to outsource the accounting and business affairs for my upcoming projects? We’re here to help by defining what production accounting for commercials is, and signs that it may be time to start searching for an appropriate service.
What is Commercial Production Accounting?
A production accountant supervises and implements the financial aspects of a production. This role comes with a long list of accounting tasks involved from day-to-day bookkeeping to the rendering of accurate cost reports.
Here’s a breakdown of all the duties a commercial production accountant is responsible for when working on your production:
Supervise the development of and managing a commercial budget
Budgets for commercials are typically locked down when the creative has been finalized. Budgets are prepared by a freelance “bidding “ producer with the assistance of a production accountant. A commercial production accountant helps your team organize and set a realistic budget for your commercial. In the pre-production stage, they analyze your project in depth to identify all the costs associated with your production to develop your commercial budget.
Bookkeeping and financial reporting (budget management)
Commercial production accountants manages bookkeeping and financial reporting by:
Making sure all transactions are properly approved by the production team.
Managing the cash flow needs of the production.
Tracking actual project spend against budget.
Reconciling all petty cash expenditures.
Preparing project accountings that can be integrated into company books.
Analysis of budgeted costs vs actual costs.
They also work with sales and marketing along with other departments to ensure that the company's financial information is accurate and up-to-date.
Payroll management
When it comes to managing the payroll process, a commercial production accounting service is responsible for:
Accurately processing crew payroll in a timely manner.
Ensuring union payroll is processed and paid within union and state guidelines.
Ensuring payroll invoices are paid timely according to state.
Maintaining payroll records, including employee timesheets, W-2 forms, and I-9 forms.
Tax compliance and insurance
A commercial production accountant handles all tax compliance, production insurance tax compliance and insurance issues, including but not limited to:
Making sure that all payroll returns are accurate.
Gathering and digitizing information for issuance of 1099’s to freelance labor.
Ensuring production is insured properly and all certificates are issued.
Vendor management
Commercial production accountants have extensive experience and have created strong relationships with production vendors including:
Payroll companies
All of which your production can benefit from. Not only can they point you to the right resources, production accountants may work closely with vendors and even negotiate with them on your productions behalf.
Production accountants play a vital role in ensuring that the production company stays on budget and on schedule. By working closely with vendors, they can help to identify and mitigate potential risks and problems.
How does a commercial production accountant differ from a traditional accountant?
When it comes to commercial production, a one-size-fits-all accountant might not be the case for your company. Commercials are produced within a short time frame and therefore require a lot of moving parts and with each project they carry their own special needs.
A commercial production accountant has a strong understanding of the entertainment industry and its unique financial tasks. They are more readily equipped to work under the tight deadlines and fast paced work environment commercial productions demand.
6 Signs It’s Time to Outsource Production Accounting for Your Commercial
So, when should you outsource production accounting for your commercial? With our experience providing production support, we’ve identified 6 different signs that may indicate it’s time to bring in the experts:
You’re over budgeting or under budgeting
It is very important for producers to set realistic budgets and stick to the planned budget as closely as possible.
Going over budget can lead to a financial loss for your company. Having a commercial production accounting service can avoid these issues by keeping track of all financial records and communicating closely with the team of any changes or concerns.
You’re facing a large corporate bureaucracy
Large corporations often have a lot of red tape, which can make it difficult to make decisions quickly. Commercials are handled in a short time frame require quick access to financial resources such as:
Getting Point of Sale (POS) approved quickly.
Processing and paying payroll on time.
Issuing P-Cards to department heads.
Taking advantage of “quick-pay” discounts.
Issuing petty cash.
All of these can be facilitated by a production accounting service. If you are producing for a large agency or brand you know how slow and difficult approvals and payments can be– making this a great resource for future commercial productions.
You have tax liability issues
Producers working on their upcoming commercial must also add set aside time to ensure their production is in compliance with all tax laws.
This requires knowledge of all the tax laws that apply to your commercial to understand how they will affect your finances. Producers must also keep track of all financial records and expenses to keep accountable when taxes are due.
Hiring a commercial production accountant can ensure your production is following all laws and regulations and track your financial records and expenses so you can work on the real work at hand within your project.
You’ve had to pay labor board or union penalties
Working with union talent and crews for your upcoming commercial means abiding by the union’s contract rules and regulations. If you are not familiar with their terms and regulations, you risk facing penalties which can easily dig into your production mark-up.
Production accountants can help you avoid penalties by following the union's rules and regulations. Some ways they can help you avoid union penalties include:
Being familiar with the union contract and terms.
Keeping accurate records of all expenses.
Cooperating and communicating accordingly with union representatives.
Also if you use a production accounting service you can have the flexibility of using union or non union talent & crews.
You’re running into bookkeeping issues
Bookkeeping issues can lead to costly consequences as you are more likely to overlook certain financial records and miss your production budget.
Missing deadlines, inaccurate financial statements, or an unreliable bookkeeping softwares can lead to added penalties and client issues. Hiring a commercial production accountant will get your bookkeeping in order and save costs on your production.
You’re having issues with cash flow on your productions
Agencies and brands can take up to 90 days to pay. Payroll and other production invoices need to be paid timely, sometimes immediately.
A commercial production accountant helps producers manage budgets and manage cash flow. A production service company can often finance the payment of critical invoices until the next agency payment is received.
Benefits of Hiring a Commercial Production Accounting Service
Commercial production accountants are here to make sure your production has a handle on their financial records. There are several benefits when working with a commercial production accountant that can make a difference in how your production establishes and manages their production budget.
Streamlined process
Commercial productions accountants have vast experience on how to handle and manage the financial side of your production. Their knowledge and skills in the industry will get your production going in no time.
Industry expertise: Commercial production accountants are experts on all tax laws, union rules & regulations related to your production and can provide guidance and support when handling your production budget.
Access to technology and vendors: Commercial production accountant has access to the right technology your production needs to keep a good track of your finances. With their extensive years working in the industry, they have trusted relationships with vendors that oftentimes they will coordinate and negotiate with on your productions behalf.
Cost savings
Hiring a commercial production accountant can actually save on costs as they accurately track and manage your budget and provide their expertise to support your team when handling finances. They can help producers save money in a number of ways, including:
Tracking and monitoring expenses which can be used to identify where costs can be reduced.
Preparing budgets for your production, which can be used to track expenses and ensure that the production stays on track financially.
Negotiating rates with vendors and suppliers, which can help to reduce costs.
Managing cash flow.
Preparing financial reports for your production will detail the income and expenses for the project. These reports can be used to assess the financial performance of a production and make necessary adjustments for the future.
Overall, by using the services of a commercial production accountant, producers can save money and ensure that their productions are financially successful.
Flexibility
A Production Accounting Service understands that these jobs might last anywhere from a couple of days to a few months. They allow the production entity the flexibility to expand and contract according to volume.
Conclusion: Streamline the Back Office Functions of Your Commercial
It becomes essential for advertisers and producers to have a handle on all their finance throughout their production to ensure they stay in line within their budget. From pre-production to post production, there is a long list of back office responsibilities that must be taken care of to ensure a smooth production. Hiring a commercial production accountant is a reliable solution for your production team as they improve financial accuracy and can help save on cost.
In need of production support? CMS has a qualified team of experts with years of experience to provide customer solutions for your production support needs. Our production support services includes:
Cash flow management
Insurance
Accounting
Purchasing cards
Petty cash
Budgeting
Line production
Consultative services
Is your team in need of our support? Contact us today to see how we can help streamline your upcoming commercial production.
