Film Production Accounting

This post has been well received ever since I first posted it in 2009. I’m updating now to bring it up to 2014 standards.

There is a professional accounting niche that is little known – Film Production Accounting. I regularly receive queries to my web site, or my blog, about film production accounting and of how to enter this field. Most of the queries used to be from the Los Angeles area, but over the past 4 years there has been an equal number of queries from the Film Tax Incentive States.

FILM PRODUCTION ACCOUNTANT CATEGORIES AND EXPECTED PAY

Production accountants have traditionally fallen into the field without much of any kind of accounting background. I believe that film production is the last industry in the world to hire accountants who don’t have some kind of formal training in accounting. Currently, the field of film accounting is looking more appealing to a wide variety of CPA’s who are looking for something more markets to penetrate – or even to change careers. Most film accountants get into that position through a period of apprenticeship as assistant accountants. The levels usually go from File Clerk, 2nd Assistant Accountant, 1st Assistant Accountant to Key Production Accountant (sometimes referred to as the Production Auditor). Another position that is classified as an assistant accountant is the Payroll Accountant. The Payroll accountant is an expert in calculating complicated union payroll time sheets and is usually too busy to do much else than just that one function. A good payroll accountant can make in the area of $1800 to $2,000/week on the bigger Hollywood productions and are worth every cent.

The File Clerk would start in the range of $500-$900/Week, a 2nd Asst Accountant in the $900 – $1400/Week range, a 1st Assistant Accountant in the range of $1,500 to $2,300/Wk.  usually the accountants get a little more on a big Studio production, and less on a small independent production.

THE SKILLS OF A FILM PRODUCTION ACCOUNTANT

The Film Production Accountant needs to be conversant with every area of film production, if not downright expert when it comes to predicting cost overruns. The rapidity of spending during the production of the feature film, or TV show, is so high that it would be a nightmare for someone who hasn’t been exposed to the usual reporting system. That’s why an experienced Film Production Accountant doesn’t get out of bed for less than $2,500 a week (a 5 day week). Experienced production accountants demand and get at least $3,500/5 day week, and if they go on location ask for another $1,000 to cover off Saturdays worked (even though they don’t need to work many Saturdays).

The Film Production Accountant’s job falls into the same three categories as any other accounting function:

- Bookkeeping: the speed of bookkeeping has to be experienced to understand. Petty Cash is often in the $60,000 to $80,000 a week range.

-Reporting: there are very specific Budgeting and Weekly Cost Report formats which can be a bit of an IQ test until you get used to it. This type of report is used throughout the film production world from Australia to India to Europe to North America.

-Auditing: because the money appears to be spent so helter-skelter it can be abused, mostly by producers and department heads. It’s up to the production accountant to see the signals and prevent it before someone embarrasses themselves. There really are lists kept of those deemed to be A, B or C listed. Those that are B and C listed are almost always because of their inability to control their departmental budgets.

So, if you have an accounting background you can pick it up very quickly, but you really do need some experience first. The fact that you’re intimately dealing with so many facets of the actual film production it’s certainly a challenge and, I have to say after 30 years, tons more challenging and rewarding than working in manufacturing, banking, etc.

MY JOURNEY TO, AND IN, FILM PRODUCTION ACCOUNTING

My own background started out in Engineering in the 70’s. Then, when I graduated I saw that open pit mining wasn’t doing it for me, so I started working with an accounting firm to earn a designation. My original purpose was to become skilled enough to be able to use both Engineering and Accounting to help failing businesses turn around. However, after I got my accounting designation I discovered that I would be taking a steep cut in pay to go back to being a junior engineer so I took a job as a Chief Accountant/Controller at a place with about 15 branches. After 5 years I went out on my own, starting a small accounting practice with a couple of other people. After a couple of years of beating the bushes and working 7 days a week I saw that I could make more money as a Film Production Accountant than I could in my practice, so I dropped my office space, my 2 staff, and started working as an assistant accountant.

STEPPING STONE TO FILM PRODUCING AND PRODUCTION MANAGING

Like other industries, after spending many years accounting for and auditing the money, including advising producers and production managers, you start to get the idea that you can do as good as, or better job, at producing. There are many production accountants who have gone on to related film production careers – although, funnily enough, they often keep quiet about it. I presume because they want to distance themselves from the infamous “Blue Suit” – the much maligned Big Studio Exec. (Not a job for me – man, talk about pressure).

THE DOWNSIDE

A downside to Production Accounting is that you don’t ever have a JOB. You get CONTRACTS which last anywhere from 5 weeks to 9 months (pretty seldom longer than that). I’d say that my average contract on a film or TV production in the $20Mil to $40Mil range was about 6 or 7 months. Honestly, I really liked the fact of working with different people. I have often talked with other people in the biz, and we almost all agree that the independence that brings is worth the stress of looking for contracts. Once you’ve been in the business for 3 years, and if you haven’t messed up, you’ll be on call, especially if you’re willing to travel.

So, there’s the pros and cons to getting into the film production industry as an accountant.

HOW TO BUST IN

I spend some time talking about ways to bust in during the weekend workshop. With the advent of tighter and tighter money I see even more opportunities for film accountants as aides to producers, or even film accountants producing projects on their own. Subjects like Film Tax Incentives, verification of paperwork required during Crowdfunding of “Accredited Investors”, cash-flow schedules, familiarity with equity terms, etc can all be easily learned by film accountants, or by professional accountants and bookkeepers interested in penetrating this market. (If you are interested in how this all fits together see this short video).

Good luck in your career, whatever you choose.

For more about training as a film accountant see this link to film accounting workshops and training online.

John Gaskin

The Film Payroll Accountant and the Payroll Service

John Gaskin

John Gaskin – Blog on Film Payroll

The Film Payroll Accountant calculates the gross amount of payroll due to the employee after calculating the three producer sins – overtime, rest violations and meal penalties. To perform this task the Film Payroll Accountant must know where to find the rules and regulations for each of the guilds and unions in the film production industry. Hmmm. If that’s the case, what does the entertainment payroll service do? Actually, quite a bit…

DEDUCTIONS, CONTRIBUTIONS AND REMITTANCES

The Film Payroll Accountant only needs to have a peripheral knowledge of the multiple government and union deductions, contributions and remittances. All of those complications are handled by the entertainment payroll service. Yup, all of those complicated letters on your W2, as well as all the Union or Guild deductions, contributions and remittances are all taken care of by the entertainment payroll service.

THE PAYROLL SERVICE IS THE EMPLOYER OF RECORD

Per IRS Regulations an Employer must keep records for a minimum of 7 years. Film and television producers do not want a potential problem obligation hanging over their heads for that long. As a result, a demand grew in the 1980’s for a payroll company to take on the legal title of “Employer of Record”. Subsequently the ‘entertainment payroll service’ became the legal Employer, relieving the Producer from all IRS, Workers Compensation and Union/Guild audits.

WHO ARE THE ENTERTAINMENT PAYROLL SERVICES

There are currently 4 major payroll services:

  1. Entertainment Partners, the first and most well established with the Majors
  2. Ease Entertainment, the most modernized
  3. Cast & Crew, has recent change of ownership; still “a contender”
  4. Media Services, well established in the commercial and reality television world.

Each of these entertainment payroll services has developed their own systems to process payroll as the “Employer of Record”, and each has designed their own proprietary general ledger software. The entertainment payroll service supplies their general ledger software for free if the production uses their payroll service. (Note: the general ledger software for each of the major payroll services has a similar look-and-feel.)

FILM PAYROLL ACCOUNTANT’S ROLE

However, and here’s the rub, the payroll service is depending on the Film Payroll Accountant to submit the timecards calculated to “Gross” per the various Union/Guild rules and regulations. And, THAT makes the Film Payroll Accountant the one who must be expert at applying the union and guild rules related to payroll.

We spend a full weekend practicing how to apply the film payroll rules for SAG, DGA, IATSE Area Standards, IATSE National Low Budget and Teamsters. See http://www.talkfilm.biz/filmworkshops6.htm for more information.

 

Cheers / John

Line Producer – Managing Film Budgets and Cost Reports

Film production has a middle management position called “Line Producer” and/or “Unit Production Manager”. This person is charged with the responsibility of bringing the production in on time and on budget – really – and from the ground level. Most Line Producers and UPM’s learn their ability to manage shooting schedules through education and on-the-job experience. But, what about managing budgets and the related weekly cost report?

Breaking In As A Line Producer – Managing Costs and Reports

How does a 1st Assistant Director, a young producer, a filmmaker, a location manager, etc bust in as a Line Producer? How do they get exposure to the very confidential Cost Reporting process? In this environment of producing films cheaper-better-faster it’s especially important for Line Producers to understand the “Production Management” of budgets and cost reports.

Confidentiality of the Management of Film Budgets and Cost Reports

The confidentiality of the film budget, and its cousin, the weekly cost report, creates a barrier for emerging Line Producers. Most learn through a series of hard-knocks, easily avoidable with some practical training. However, there just isn’t any time on set for an active Line Producer to apprentice someone. It’s too fast and too late. The only way to learn this very important aspect of the film BUSINESS is to train in a controlled environment.

The Practical Methods of Managing Budgets and Costs

During a series of 6 live webinars, each 90 minutes long, we will review a $9Mil budget from several angles, learning the practical methods of managing a film budget used by film producers and production accountants everywhere. From that very important step, we practice the essential steps in controlling and reporting the production costs through the Weekly Cost Report – this report is fundamental to ALL media-based productions, and is reviewed weekly by the completion guarantors, the financiers, the studios, etc. In addition you will be introduced to the 6 basic ways that you can use to control the costs before they are spent.

Visit http://www.talkfilm.biz/filmworkshops5.htm to learn more. The next series of live online webinars is every Tuesday and Thursday night starting October 28, 2014. Note that the webinars are recorded for review at your convenience.

Cheers / John

Film Payroll Accountant – Most In-Demand Job in Film Accounting

There aren’t many ways to assess the demand for film production accountants. The film business is really a word-of-mouth industry. Getting verifiable statistics of the demand for those who work at the various levels of film production accounting are usually hard to find.

EMILY’S LIST

However, there is one source that many studios, producers and production accountants have used to find available film accountants. It’s referred to as “Emily’s List”. The postings are looking for various levels of film accountants to work across America, and even up into Canada. The internet address for Emily’s List is at https://sites.google.com/site/ricegortonpictures/film-tv-prodn-accounting-listings-1

4 OUT OF 10 LISTINGS ARE FOR PAYROLL ACCOUNTANTS

I went through the last 120 listings or so, from Sept 24/14 backwards to Aug 14/14, to discover how many requests were for Payroll Accountants. I found that 4 out of 10 listings are for either a Film Payroll Accountant, or for a Film Payroll Clerk. That makes the other 6 out of 10 listings shared by Key Accountants, 1st Assistant Accountants, 2nd Assistant Accountants and File Clerks. Wow…. that proves to me that the Payroll Accountant is a scarce commodity.

CALCULATING TO “GROSS PAY” ONLY

As you can see from my other posts, film payroll accounting is all about knowing how to calculate the “Gross Pay” – that is, the Overtime Hours multiplied by the contracted rate, plus any meal penalties and rest violations. You won’t need to know about government and union withholdings and contributions – all of that nasty stuff is done by the payroll service.

PRACTICE, PRACTICE, PRACTICE

So, the task becomes knowing how to calculate union payroll, and that’s all we do for 2 full days – right from beginning to end. You will be left with all of the reference material for SAG, DGA, IATSE Area Standards, and IATSE Low Budget Agreement, as well as on-line access to the full courses and materials for future reference. (A Michigan Teamster Agreement is reviewed at the end of the 2nd day; however, after doing the above it seems pretty simple).

I did a screen recording to give you a better idea of how the Film Payroll workshop works – see this short YouTube video:  http://youtu.be/GcwXoq0cRE8

The payroll workshop is over the weekend of Nov 8th and 9th, 2014 in Toronto; and again on Feb 7th and 8th, 2015 in Atlanta.

Hope to see you there!

For more info you can check out my web site at http://www.filmaccounting.com/filmworkshops6.htm

Best / John

Film Unions – Finding Financing or Finding Work

FINDING FILM FINANCING, OR EVEN JUST FINDING WORK

In my last article, “Finding Film Financing – Can it be Taught?” I listed several blocks of knowledge which could be taught. Having a workable understanding of such things as Union/Guild Agreements, Film Payroll, Bank Loans, Tax Credits, Production Cost Controls, etc., and how they weave together, will project you as a competent professional.

KNOWING FILM UNION AGREEMENTS ELEVATES YOUR STATUS

Does that mean that a financier will invest in your film project if you know your way around film Guild and Union Agreements (SAG, DGA, IATSE, etc)? Not necessarily. But it does mean that an experienced financier will have more confidence in your decision-making, and will have more confidence in referring you, listening to other strategies more suitable to their portfolio, etc. It definitely gives you an elevated status which the film community will pick up on. That financier might just say, “I’m looking for a young executive like you…” and start negotiating a contract to keep you on full-time.

WORD OF MOUTH IS EVERYTHING IN THE FILM COMMUNITY

The film and television production community prides itself as being much different from the rest of the business world. Word of mouth is everything. Impress one studio executive, or an experienced bond company representative, or a state tax administrator, etc. and believe me you have just made an “in” with their contacts as well. There are so many “wannabe’s” and only a few who will actually go the extra mile to learn the financial building blocks of the business of producing film and television content. Show them you’re in that small group who understand Guild and Union Agreements and their confidence in you rises sharply.

FILM PAYROLL RULES ARE LOCATED WITHIN EVERY “AGREEMENT”

The film unions and guilds have made “Agreements” with the Alliance of Motion Picture and Television Producers, generally known as the AMPTP. The “Agreements” state the rules of the contract between the Guild or Union and the Producer, including all payroll rules.

Each Guild/Union has broken down their rules for calculating payroll into the following 4 categories:

  1. The “Basic Day” and Overtime Rules
  2. The penalties associated with “Rest Violations” (also called “Turnaround”, or “Forced Calls”).
  3. The penalties associated with violating Meal Periods (called “Meal Penalties”).
  4. The various circumstances associated with Travel – whether to a “Distant Location” (i.e. staying in a hotel), or traveling outside of a defined “Studio Zone”.

Once you know where these points are in each of the agreements your task becomes one of familiarization and practice.

THE NECESSARY TRAINING AND PRACTICE

I’ve found that a full weekend practicing the feature film payroll rules, followed up by on-line links to all the materials, is plenty for your average person to learn how to manage and to calculate the union/guild payrolls to “gross” (i.e. to the gross amount of pay due before union and government benefits/deductions). I also supply timecard templates (yes, with the formulas) which are “helpers”. Once you have a working understanding of the various Agreements you can fluidly optimize your management of any union/guild within your production.

For more information see http://www.talkfilm.biz

Cheers / John

 

Finding Film Financing – Can It Be Taught?

A friend of mine told me that he is very interested in opening a Film Financing School in Los Angeles. The school would deliver a series of comprehensive courses by industry professionals. His investors have asked him why no one else has done it before. My friend asked me how I would respond to that question. When I started to answer him, I realized that I needed to find out what others thought. Please feel free to chip in with your opinion.

FINDING FINANCING IS A GAME OF CREATING CONFIDENCE

Finding financing is primarily a game of creating confidence – this is true of any business, but especially of film financing. Those who have expendable income can afford to have professional investment advisers. Those advisers are allergic to risk – period. This is not only true of “Accredited Investors” (those who the Securities Commission have defined as being open to general solicitation of funds) but also of the Major Studios.

REDUCING RISK FOR INVESTORS

So, Film Financing is a game of reducing the risk for investors. Reducing risks CAN be taught. It just isn’t taught in film schools, and is only very rarely addressed in graduate schools. Remember that those with expendable income generally have a wide spectrum of ways to invest their funds. Film is risky; however, it is also sexy, and if a large amount of the risk is eliminated through good business practice I believe that investors will come.

CREATIVE BUSINESS PRACTICES

How do you reduce the risk? The answer could generally be split into two fields: the creative script, and creatively performing the business of film and television.

The creative script is where 90% of the effort is placed, and that’s why so few Indies make it. The writing and casting of the script is left alone here. That is something that the film schools DO know how to teach. In this blog let’s look only at the creative business practices and what it takes to reduce risks as perceived by the investor.

FILM FINANCING – WHAT IS THE BEST COURSE CONTENT

Here is where I need your help. Can you give me feedback as to what you would like to learn in order to make film financing a possibility for you? These are the categories that I feel are needed. Each of these courses/categories could be attended separately; however, it would be best in sequence. These categories are well in advance of most of what’s on the web. Please let me know how you feel about it, especially if you would rather do it online, as opposed to going to LA to attend in person :

  1. Film Budgeting and Scheduling: using Excel and/or Movie Magic applied to an actual script.
  2. State Tax Incentive estimating on at least three film friendly States (say, Georgia, Louisiana and California), utilizing the film budget and shooting schedule completed above. Once an estimation is learned, then the student must learn how to best monetize that tax credit estimate.
  3. Process “An Offer to Sell Securities”, otherwise known as Crowd Funding, applying the current rules and forms per the US Securities and Exchange Commission.
  4. Prepare Cash Flow Schedules (both cash expended and cash funding arranged/postulated) acceptable by a bank as part of a Bank Loan Process. Use the Film Budget as the basis for the cash expended and the State Tax Credits, Pre-Sales to specific territories and Equity expected as the cash funding arranged/postulated.
  5. Process a mock bank loan based on an actual loan processed to experience the range of legal and accounting documents required by the banker and the Completion Guarantor. Use the cash flows above as the basis to estimate the loan interest.
  6. An introduction to the Guilds and Unions of the film industry: What are the general rules of payment and fringe due per the rules of the Writers Guild, the Screen Actors Guild, the Director’s Guild and the IATSE crew unions. How does the residual system work and what are the budgeting and cash flow obligations which the producer must manage.
  7. Film Production Cost Control Points for both producers and accountants: The investors need to know that you have the ability to control production; otherwise the investors will cut you out of the process very early on. The only way for them to have confidence in you is if you can demonstrate an understanding of film industry specific production workflows, forms and practices, including your relationship with the Completion Guarantor through the weekly Cost Report.
  8. Final Business Plan: Bring together all of the above into a final business plan that is professional looking, scalable and defensible.
  9. Salesmanship: reenactments of pitching investors with the business plan above, pitching the script, assuring investors that you CAN control the costs during production, etc. This level is very much a practical where the student will bring together all of his/her knowledge of the line items above.
  10. Other: There are certain legal templates used to Incorporate as an LLC, to acquire Rights Ownership, to write Distribution Agreements, format Pre-Sales of Rights to Territories, Equity sweeteners, etc that can either be introduced within the subjects above, or brought into the mix after acquiring the knowledge above.

 

Each of the 9 items above would have a unique curriculum.

QUESTIONS

There is no guarantee that the Semester Credits would count towards a degree in another university. Is that important to you?

Does this comprehensive course appeal to you? Would it be better delivered in person, or online?

All for now,

Cheers / John

The Georgia State Film Tax Credit – A 7 Step Cycle

The purpose of this article is to introduce Indie Producers, and CPA’s new to film, the workings of film tax incentives in the booming State of Georgia. In most cases Georgia’s documents are very clearly laid out. In this article I have stripped down the full cycle from start of finish into 7 steps, with references to key forms and legislation, with a tip or two thrown in.

Indie Producers need to know this so they can bring some financing to the table when searching for funding. CPA’s need to know this to be able to provide services to their filmmaking clients.

1. The Rate and Type of Tax Credit Offered

Rate of tax credit is a 20% base + 10% if use the Georgia Logo – a no-brainer – of course we will use the Georgia Logo and add it to the credit roll (5 seconds of exposure required). So, 30% is the rate. Reference: Rules of the GA Dept of Economic Development, Chapter 159-1-1.01(1). The type of tax credit is referred to as a “Transferable Tax Credit”; that is, you can sell the tax credit to a Georgia taxpayer who can then apply that tax credit to their state tax liabilities.

2. Estimate the Tax Credit as Part of the Financing

The Tax Credit is the one thing that the Indie Producer can bring to the table as a Producer. This is key and fundamental to BEING a Producer. Essentially all labor qualifies up to $500,000 per person on payroll, as well as all non-labor costs that have a real Georgia address. So, work through your budget estimating at 30%. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(6)(c) and (d) and (f).

Note that the project will not qualify for the tax credits if it is not fully funded/financed anyway, so estimating the tax credit is a crucial first step to arranging the financing. See Reference: Rules of the GA Dept of Economic Development Chapter 159-1-1.04(3)

3. Applying for Certification to be a “Qualified Project”

See the application form by clicking here. It is pretty straight forward. It’s interesting to note that the application does not require a budget, but it does require a script. Also, the application cannot be made prior to 90 days of principal photography – so, you really should have all of your ducks in a row by then, down to the key cast and crew. Reference: Rules of the GA Dept of Economic Development Chapter 159-1-1.04(1)

4. “Qualified Production Expenses” Gathered in the “Georgia Expenditure Form”

See the Georgia Expenditure Form by clicking here. You would get these costs from the production’s Final Cost Report. Note: The film accountant would need to have a good understanding of what qualified as an expense and be tracking those costs within the general ledger. The State of California publishes a great document called Expenditure Tracking Tips. Download it by clicking here. It’s very useful.

5. Claiming the Tax Credit from the State

See the Film Tax Credit Form by clicking here. You need to file this completed form attached to the original certification received in #1 above, along with the production company’s Georgia income tax return. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(8)(a). Per 560-7-8-.45(8)(b)2 the State has 120 days to review the credit and make a determination. The better the presentation, the faster the review – thus, the recommendations on the Georgia site to use a CPA even though it isn’t mandatory. (BTW I know an experienced Georgia CPA who is quick and excellent if you need one – not me; honestly, it’s not something I like doing).

 6. Selling the Tax Credit (“Letter of Eligibility”)

Once the review is successful the state will issue a “Letter of Eligibility”. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(8)(b)(3). You can now market this letter to the highest bidder. It’s best to use a broker here – again, I have a reliable acquaintance experienced in brokering these Letters of Eligibility. The goal is to sell the tax credit for more than 85% of its value to a Georgia taxpayer who has state tax liabilities. Note that the tax credit can be sold in multiple pieces to different taxpayers; however, the credits cannot be re-sold. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(11)(b).

7. File Notice of Credit Transfer

You’re not quite finished yet. Now you need to file a Notice of Tax Credit Transfer (Form IT Trans) with both the Dept of Economic Development and the Dept of Revenue within 30 days of each sale of the film tax credit. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(11)(d).

Wheww. Now you’re done! If you need help working your way through any part of the above, please send me a comment.

Cheers.

-John

See http://www.filmaccounting.com for my most recent workshops.

What Producers Want To Know About Film Accounting

Over the past few years I have been delivering workshops on Film Accounting to Women In Film and Television to maximum attendance and rave reviews from the attendees. I say this, not to brag (well, maybe a little), but more to emphasize that we covered topics which emerging producers want to know more about.

There were three areas that we covered over 3 days which resonated with all attendees:

1.THE FINANCIAL AND ACCOUNTING CONTROL POINTS

The students drilled utilizing the typical forms and rules used in film production accounting, getting a reality on how they, as producers, can control the costs on their own productions. Students went home with templates and forms, including the typical form flow charts of all basic film accounting processes.

2.A WORKING UNDERSTANDING OF THE FILM BUDGET AND THE “COST REPORT”

The Cost Report issued during any film or television production is the career maker/breaker for any producer. The student is left with an understanding of how to present, read and manipulate the Cost Report, something so important to their career as a producer.

3.A WORKING UNDERSTANDING OF CASHFLOW REPORTS AND FILM TAX CREDIT ESTIMATION

An emerging producer who can prepare a weekly cash-flow schedule from the budget, as well as a reliable estimate of the tax credits expected, is far in advance of other emerging producers in the same pool. Students received cash-flow templates, and various tax credit estimating templates as well.

REAL SITUATIONS

Within these three areas I conveyed as many real situations as I could, throwing in examples of fraud and how to control it, examples of “Back-End” deals and how to sweeten them, examples of bank loan interest and how it works, etc.

FILM ACCOUNTING WORKSHOP 101

My Film Accounting 101 workshop coming up in NYC next month and GA in Jan/15 does not cover the Step 3 above – the curriculum is more designed for those who want to actually work as film accountants. However, the testimonial below from a producer who recently attended reminded me that it is still what many producers want to know about film accounting:

“John Gaskin has an amazing wealth of knowledge that crosses over into various film departments. In his Film Accounting workshop, he outlines the big picture of film financing and production, and then hones in on the detailed accounting procedures. As a producer, the course has given me the confidence to manage larger budgets and communicate with production accountants more thoroughly on different points of financial control. In addition to attending his course, I also read his book “Walk the Talk”, which I’ve recommended to other industry professionals many times. With both formats John breaks down a breadth of complex information in a manner that is clear and digestible.” SR

To all you emerging producers, find out more about the Film Accounting 101 workshop at http://www.filmaccounting.com

Cheers / John

Film Accounting – Understanding Union Payroll

For anyone who has ever tried to understand how to pay a SAG Performer, take heart. Know that when you look at the full 710 pages of the SAG “Codified Basic Agreement” you really only need to understand 15 to 20 pages of that tome. This is also true to a lesser extent for the Directors Guild of America (DGA), the International Alliance of Theatrical and Stage Employees (IATSE) and the Teamsters working in film.

FILM PAYROLL RULES ARE LOCATED WITHIN EVERY “AGREEMENT”

The film unions and guilds have made “Agreements” with the Alliance of Motion Picture and Television Producers, generally known as the AMPTP. The “Agreements” state the rules of the contract between the Guild or Union and the Producer, including all payroll rules.

Each Guild/Union has broken down their rules into the following 4 categories:

  1. The “Basic Day” and Overtime Rules
  2. The penalties associated with “Rest Violations” (also called “Turnaround”).
  3. The penalties associated with violating Meal Periods (called “Meal Penalties”).
  4. The various circumstances associated with Travel – whether to a “Distant Location” (i.e. staying in a hotel), or traveling outside of a defined “Studio Zone” (also often referred to in each locale as “The Circle”).

Once you know where these points are in each of the agreements your task becomes one of familiarization and practice.

THE NECESSARY TRAINING AND PRACTICE

I’ve found that a full weekend practicing the feature film payroll rules, followed up by on-line links to all the materials, is plenty for your average person to learn how to calculate the union/guild payrolls to “gross” (i.e. to the gross amount of pay due before union and government benefits/deductions). I also supply timecard templates (yes, with the formulas) which are “helpers”

SCOPE OF THE US FILM PAYROLL WORKSHOPS:

The solution to understanding Film Guild/Union Payroll is to find a central source of contracts for SAG, DGA and IATSE then summarize the four categories of payroll rules mentioned above. Then have someone show you their version of Excel formulas which comply with these central rules. At the risk of shameless self-promotion, I have done that, one union at a time for each of:

  • SAG
  • DGA,
  • IATSE National Low Budget (any feature or TV production in North America less than $13Mil) and
  • IATSE Area Standards (any feature or TV production greater than $13Mil outside of the Los Angeles and New York zones).
  • I have a general Teamster contract for the non-LA/NY areas, but, honestly, it’s child’s play to understand after learning the above.

Actually, it is not a problem for me to say that if you understand SAG, DGA, IATSE Low Budget and IATSE Area Standards payroll rules, you can understand Film/TV payroll anywhere in America – it would only be necessary to get a copy of the local contracts in those higher production centers and you’d be ready in a day or so.

For more information see http://www.filmaccounting.com

Cheers / John

 

Film Accounting – Georgia and New York

GEORGIA GOVERNOR COMMITTED TO FILM PRODUCTION INCENTIVES

Georgia Governor, Nathan Deal, is solidly behind the film tax incentives in Georgia, according to a Georgia news release this month. “Not only has this industry created jobs and investment opportunities for Georgians, it also has revitalized communities, established new educational programs, tourism product and more,” said Deal. “I will continue my commitment to growing this industry and to developing a film-ready workforce to meet the needs of the productions that are setting up shop in Georgia.”

CREATING JOBS FOR GEORGIANS

According to the Motion Picture Association of America (MPAA), the motion picture and television industry is responsible for more than 77,900 jobs and $3.8 billion in total wages in Georgia, including indirect jobs and wages. Nearly 23,500 people are directly employed by the motion picture and television industry in Georgia, including 8,188 production-related employees. These local businesses include technology, lodging, real estate and food service.

CREATING JOBS FOR NEW YORKERS – AND OTHER STATES

Governor Cuomo has been behind New York legislation which has allocated $420 million per year for the calendar years 2015-2019. Louisiana is also booming, at least as much as Georgia. Other States with promising film production statistics are Pennsylvania, Ohio, Illinois, Alaska and New Mexico. Three other States with very good film productive incentives are Massachusetts, Florida and Alabama. Check the incentives map here for current tax incentives by State.

CROSSING OVER TO FILM ACCOUNTING

All this is creating a demand for Film Production Accountants. Film accountants generally train through a series of apprenticeships. A CPA designation is not a requirement; although having a CPA designation would definitely mean a faster rise through the ranks. How do you get your foot in the door? The biggest complaint I hear is, “The Key Accountants only want to hire experienced assistants.” So, the assistants are imported from out-of-town.

HOW DO YOU GET EXPERIENCE IF YOU CAN’T GET HIRED?

A solution is to “get up to speed” in workshops like these, learning the various film accounting techniques by practicing in a controlled environment. We use the unique proprietary film accounting software used in film production, taking the time to clear up the industry specific terms, reports and processes. (Note: this software cannot be purchased, only leased).

See http://www.filmaccounting.com for more information.

Cheers / John

 

Film Accounting – Fresh and Fun CPE

overviewFILM ACCOUNTING COURSES

A few years ago the Connecticut Film Tax Credit Administrator, Ed Ruggiero, asked me to deliver a workshop to CPA’s who were interested in performing audits of film productions for the CT State Tax Credit. I did just that, successfully helping several local CPA’s understand the Film Industry and Film Accounting much better. However, subsequent scheduling of workshops for CT CPA’s was difficult. As a result, I put together 4 online courses as a substitute to a live workshop.

LET YOUR PEERS DO THE TALKING

Online courses have an earned reputation as being rather boring, slow and sometimes downright monotonous. Most of us would rather have a live workshop during the workweek, with lots of interaction among the other attendees and the instructor. However, getting to the workshop location, and breaking away from the office, aren’t always possible – for you or for me. So, how do you evaluate which online CPE course to take? The easiest way is to check out what your peers have said about the courses.

EVALUATION OF MY ONLINE COURSES HAVE A SCORE OF 100%

At the end of each online course qualifying for CPE I ask the student if the “stated objectives of the course” were met. There has never been a “No” yet…. that’s 100% of the time every student has said that the stated objectives were met. Several students also had other good things to say.

A SAMPLE OF ADDITIONAL COMMENTS MADE BY STUDENTS

1. Film Accounting and Auditing – An Overview

  • “Yes. Great introduction of the role the production accountant will play within the overall film production life-cycle.”
  • “Yes – it was pretty much an overview. I feel I have a much better understanding of film accounting now.”
  • “Yes! Very easy to follow. An excellent intro to the industry.”

2. Film Accounting and Auditing – The Basics

  • “Yes, great to see the various sample forms. The workflow charts are also very helpful.”
  • “Yes, the detailed explanations of the various forms, as well as the general ledger software, were very helpful.”
  • “Yes, very useful. I now have a sound understanding of the basic principles of production accounting.”

3. Film Accounting and Auditing – Intermediate

  • “Yes. Great explanation of the inter-relationships between the various reports and overview of the audit plan.”
  • “Yes. Enjoyed the course and learned a great deal about auditing productions.”

For more detailed information about the online courses see http://www.filmaccounting.com/filmaccounting-cpe.htm

If you would like to see the stated objectives of the courses I have listed them below, along with links to short YouTube videos describing each of the course’s content.

Cheers,

John

- John has worked on over 50 film and television productions in 6 countries since 1985 on productions big and small. For more information on his credentials see http://www.filmaccounting.com/filmaccounting-cpe.htm

___________________________________________________________________________________

 

An Overview – The Learning Objective Met By 100% of the Students: The participant will understand the overall business cycle of the Film Industry with specific attention on the workflow, general terminology and film industry specific accounting practices of Film and Television Production. No advanced preparation is required. See this short video reviewing the content of this course.

The Basics Course – The Learning Objective Met By 100% of the Students: The participant will be familiarized with the film production processes, forms and control points of a usual film production. With this knowledge the participant will be “up to speed” with the books and records of a usual film or television production.  No advanced preparation is required. See this short video reviewing the content of this course.

The Intermediate Course – The Learning Objective Met by 100% of the Students: (Prerequisite: An Overview) The participant will understand the interaction among the production entity, the approved budget, the production documents (Call Sheets, Daily Production Reports, etc) and the Final Cost Report – prepared by the film production accountant, this is the document audited for film tax credit certification. From this understanding an external auditor will be able to plan the tax credit audit with an understanding of all industry specific factors.  No advanced preparation is required. See this short video reviewing the content of this course.

The Advanced Course – The Learning Objective Met By 100% of the Students: (Prerequisites: An Overview and Intermediate)The participant will have an understanding of various State requirements to certify the production for Tax Credit purposes. From this understanding participants can confidently comply with their own particular locale’s certification requirements. The categories closely examined are Qualified Expenses (Payroll, Non-Payroll, Real Property) as well as Related Party Transactions, Ownership and Sources of Funds. No advance preparation is required. See this short video reviewing the content of this course.

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