#6 of 7 – The Film Production Report Card
May 2, 2011 Leave a comment
The game of Cost Reporting is the game of honestly offsetting the projected ‘Over-Budget’ costs with the projected ‘Under-Budget’ costs. It’s not unlike ‘Directing’, only you’re ‘Directing’ the money.
If there are no ‘Under-Budget’ costs projected anywhere, then it is up to you as Producer, Director, Department Head, general crew member, etc. to come up with proposed changes to the shooting direction that will result in real projected cost savings.
Of course, it is the prerogative of the Financier/Studio to approve the ‘Over-Budget’ costs. The additional costs may be thought to enhance the revenue earning capacity of the film to a greater degree than the total additional costs.
It’s not uncommon to hear in the news about a wildly Over-Budget movie like ‘Titanic’ or ‘Water World’. In reality, there aren’t many films that get that far out of hand. With only two or three exceptions, most of the films that I’ve worked on have been produced for amounts in close proximity to the Approved Budget.
In my world, it certainly is a career breaker to fail to report Over-Budget costs when they are occurring, or, if not yet occurred, are predicted to be over-budget (based on a sensible projection of the cost trends to that time). Even more to the point, it’s a career breaker to have not foreseen those Over-Budget costs, regardless of very good reasons offered up by the Director, Producer, Accountant, Department Head, etc. why they didn’t know.
The whole reason for a Weekly Cost Report is to give the Studio Execs, Producers, Bonding Company, etc. enough time to correct for any projected over-budget costs (that is, to find ways to cut the costs in the remaining time of shooting, or to find more money, etc).
Now let’s get down to the nitty-gritty of this little known, but key, film production report.
The first thing to understand is the simple arithmetic of the report. First, have a look at the table below , orclick here to see a clear pdf page, and then follow each of the columns as described in the next paragraph.
When examining the 10 columns below, keep in mind the following simple arithmetic:
Col. 1 and 2: are the account number and description of the account.
Col. 3: The numbers here represent the costs PAID THIS WEEK only.
Col. 4: The numbers here represent the costs PAID from inception to the current date.
Col. 5: The commitments are largely Purchase Orders committed but not yet paid.
Col. 6: Total Costs = Col. 4(Cumulative Costs PAID) + Col. 5(PO’s not yet paid)
Col. 7: Estimate-To-Complete = Amount of money needed to complete the production.
Col. 8:Estimated-Final-Costs = Col. 6(Total Costs Paid/Committed) + Col. 5(ETC’s)
Col. 9: The Final Approved Budget (sometimes called the ‘locked’ budget.
Col.10:Variance is the difference between Col. 7(Budget) and the Col.6 (EFC’s)
Here’s a rule:
The best way to ‘Direct the Money’ is to have a general understanding of the costs and how best to present those costs as compared to budget.
Your motivation for adopting this rule for your own may simply be a matter of survival—that is, if you go over budget too many times nobody will hire you. Or, you may just find it more rewarding to make sure that the money allocated to your film production is being spent in such a way as to make your film the best it can be.
In any case, the principle is to ‘Direct the Money’. Once the budget has been approved, you then need to be familiar with the trend of spending as compared to that approved budget – IT HAS AN IMPACT ON YOUR CAREER.
As you start shooting, and one day follows the next, the budgeted costs get consumed to some degree. The Final Approved Budget is a fixed number. You now need to put your attention on the Estimates-To-Complete.
The budgeted costs that were approved before you started shooting is now only meaningful when compared to:
-the amount spent to date (Column 6, Total Costs), and
-the amount allowed for finishing the production (Column 7, Estimates To Complete).
The most important column is the ‘Estimate-To-Complete’ column. This column is usually referred to as the ETC’s.
Most of your attention should go there—that’s where the treasures are buried, or the reputations ruined. I know one well-known producer who starts out a Cost Report meeting by drawing a highlighter vertically down that one column. Then, as we go through the Cost Report, her attention is drawn primarily to the ETC’s.
The ETC is the column that tells you how much is left to spend on that particular line item. In our table above, look at the line for account #807-30 ‘TRAVEL & LIVING’.
As you can see, the Estimate-To-Complete is $39,635. That’s the annual income for a lot of families. It can also hold a story or two:
1) It might look like such a large amount that no one would think to question it; but, on further detailed study turn out to be woefully short of the needed amount, or
2) It might have $20,000 too much that won’t be noticed without a detailed study. That $20,000 could be the deciding factor on committing to your favorite crane shot, a SPFX trick, a rough-and-tumble stunt, etc.
As a Producer or Director you want to know if it’s 1. or 2. above. The only way to do that is to ask someone (probably the Line Producer, UPM or Accountant) to project the remaining cost of travel & living person by person to see if the ETC’s will be enough, too little or more than enough.
There are several ‘tricks of the trade’ in reading a Weekly Cost Report. They’re available in my book,“Walk The Talk”.
Get a good book, that’s easy to read, that lays it out for you. As of July 27/08 both the University of Southern California Masters of Fine Arts (Peter Stark Program) and the University of Tampa Film Program have ordered my book, “Walk The Talk” as required reading for their students.
They’re available in my book – see my web site here “Walk The Talk”. All of them are simple but effective.