The Biggest Film Killer of All Time

When it comes to company completing the production process of a film, possibly one of the most important factors is the budget. That may sound like a cliche and an obvious statement, but there is more going into that than one may think. Take for example a film that manages to raise 30-40% of their budget and decides to still shoot anyways; this is, was and always will be a major mistake and it's usually taken by first time amateur directors/producers. Another blunder is under estimating, figuring and anticipating lesser costs any given shoot will be; or just not keeping good track of expenses and often running over budget and behind schedule. Everyone is so eager to start production that the accounting aspect of it often goes under-looked or should I say overlooked. If you're not producing a bonded film, read on. Below are some suggestions that will allow your film to have a better chance at being completed straight through to distribution.

Budget & Planning
The budget is essentially your blueprint for success, a timeline of sorts that will help keep you on schedule to complete your film in all areas of the process. The budget is your most important planning guide, which will allow you to see how grand (or not) your picture is, what your financial expectations are, necessary resources, your detailed list for tax filings, payouts, receipt calculations, and profit participation asking others. It is also necessary to include in your business plans as a way of communicating the direction in which you will be heading financially.

Budgeting is about ratios which are comparative to the script in question and directly relates or effects the schedule or some may see the budget effected by the schedule in some cases. Find yourself a UPM (Unit Production Manager) or a line producer if you have no idea how to budget a film.

Accounting
Being an accountant isn't a glamorous position on a motion picture, but it sure is one of the most important once money starts going out. Having an accountant, for most productions, is as important as having a camera on-set. See it as the budget being your map and the accountant as your guide that will safely get your picture to completion. They will catch any misuse of expenses, over payment on a line item, etc. and in the end saving both time and money.

Misspending could be looked at as one of the bigger reasons why films aren't completed. Misspending is referred to as personal expenses, expenses not listed on the budget sheet, wrong line items, and of the like. Best rule of thumb is for every purchase/expense there needs to be a receipt and that receipt must be for a particular item listed on the budget. Many people will have access to spending, not just the producers, set decorators for example will have an expense account and all receipts must be turned in and those receipts must not exceed the amount budgeted per set.

While having an accountant on staff early in your development and/or pre-production may not seem like a necessary expense at the time, but it will pay dividends later. While you're concentrating on everything else that is a motion picture can be, rest assured that the accounting is a task you won't (and don't) want to put the time and energy into.

Record Keeping
No film could be completed without GOOD financial records. A film production is hectic, miserable and crazy enough why make it more difficult by not keeping good books? I have worked on two particular pictures in which the set was run beautifully, scheduling was always kept and things seemed to be flowing extremely well...at least in that regard. Both films shut down due to improper keeping of financial records, haphazard spending and the accountant/business manager/record keeper was also the director/writer/producer. That's not to say one shouldn't wear many hats, most often on an independent film you must in order to keep within the budget constraints and have a better shot at completing your film. However, I wouldn't recommend you wear the hats of the accounting dept in addition to your creative responsibilities. In addition, if you're privately financed, you should be able to display your books for any who inquire and that information should be readily available at all times.

Keeping records has a two-fold purpose; first is the obvious track of expenses, who got paid and when, how much money is left, are you on track and when it comes time to file taxes. It also helps with the bottom-line expectations for those working for profits of the film. Failing to report those expenses lowers your break-even point! Side note: if the state you're shooting your film in offers a tax return on monies spent within the state, you will not see a dime if you don't have receipts/records of expenses and you could potentially lose out on a nice chunk of change and a solid option of financing.

The second purpose is the impact on scheduling and creative decision making. A good accountant working in connection with a good line producer will allow you to keep tabs on department expenses which you can then work within your remaining shooting schedule. Example would be if you have a $250,000 set construction budget for a 30 day shooting schedule and you come to realize that you've spent $200,000 in a 20 day period, you have some hard choices to make in order to get your film done if your expenses were equal on each day of shooting. If that is the case you will have to cut costs from other line items and those departments suffer, or you can simply just increase the cost of the production and look for further investment which isn't always the greatest choice. Now, if you didn't realize your overage by the example given above you will find yourself with no money in the bank and ultimately having to shut down your production.
As you near the end of your shooting schedule, things tend to get a little more crazy. Things such as accounting and record keeping tend to go to the way side because of many different creative factors that come into play during crunch time. Start early and prevent any loss of receipts, over-calculations, and piling of reimbursements; instead set a system which at the end of each day someone collects all receipts from the day and they match and the days cost can be accounted for.

Loose Spending
One of the other big causes for a film to be shut down is nickel and diming. I remember reading about a picture being shot on a ultra-low budget, cast notable actors, a seemingly good story-line (from what I read of it online) and they were full into production. Then I read it was shut down. Now not knowing the full details of the budget and schedule I didn't know why they couldn't complete. I spoke with someone that worked briefly on the project and come to realize they overspent but didn't know where. Money just seemed to disappear. I came to know that what could have been a contributor to that disappearing act was the big fancy office they leased for their entire operation. I was told it was a nice plush space that was beautifully decorated and had all the state of the art equipment, desks, chairs, faxes, phones, etc. They also had promotional items such as shirts, hats, posters, cards, etc. That they gave away to friends, family, anyone who would take one. That is all nice I suppose but they paid the ultimate price for the fancy office. Do yourself a favor when working on your next project, borrow an office, have someone donate in-kind to your production, or budget for one that is nothing more than a box. There simply is no need for a A-grade office space, it will sap your budget before you know it. Also, if you want to get hats and t-shirts for your cast and crew that's fine as long as it's budgeted for it; but why spend your production budget on promotional materials that could be covered by a distribution company looking to exploit and distribute your film?

In the end, whether you're a producer, director, actor or a production assistant your career is important and each film you choose to work on is supposed to be an important step in the right direction. So if you hear a producer tell you they have their expenses and budget "worked out in their head" or "I'm handling the accounting" or any variation that is NOT "the in-house accounts name is and they can be found at the home office" then chances are good the film isn't going to workout and therefore you should consider your choices. Those that have bad business practices not only won't have anyone working with them but they can potentially face some strong legal action if not from the taxman but from any investors that trusted them to bring the story they believed in to life. So play it safe, play it smart and always account for accounting.