Continuing our production accounting / payroll series, I asked New York Production Accountant, Julie Velez, to answer some questions for me. She was kind enough to provide some stellar answers that I think will be very helpful for a lot of you guys out there.
1. What are the 3 most common mistakes you see indie producers make when it comes to production accounting and/or payroll?
Some Producer’s want to be able to control every cost that is accumulated and sometimes that is not possible. The use of Purchase Order’s is the best way to control what is being spent but within reason. I once worked with a Line Producer who wanted to PO absolutely everything which they learned early on was unrealistic. Asking for a P.O for EVERY cost eventually backed things up in the Production Office which then delayed the Accounting Department from receiving these PO’s which then made the weekly Cost Report inaccurate. PO’s are estimates but that can help with spending control once reviewed for approval from the Producer.
I think Producers should really understand union rules regarding pay for creating the budget and for during the shoot. Payroll costs can come in much higher than expected. For example, when paying actors indie producers need to take into account travel to and from the production, wardrobe fittings, meal penalties and overtime. That way, then when it is time for submitting timecards or reviewing the daily Hot Costs they will know what to expect and that there are no surprises.
Really communicate clearly the terms when hiring an employee about how things financially will be during the production. Clearly a rate has to be established but make sure they understand whether they have a box rental, if overtime is available, if there is a per diem, if they are allowed to get meals reimburse etc… I find from time to time employees are unaware at the beginning of the production of what they can or cannot spend and then some of those expenses become ineligible for reimbursement.