Producers and content creators budgeting their media projects without the aid of a production accountant may need some assistance getting started. If that’s you, you’re in the right place.
We’ll walk you through five tips to keep in mind when creating a production budget that’ll keep you one step ahead of spending, and never leave you behind the eight ball when it comes to budgeting for content creation.
1. Select the right production budget template for your project.
Whether your project is for film, TV, commercial, branded content, esports, you name it – there’s a production budget template out there for you. If you’ve never done one of these before, starting from a fitting template will get you well on your way, and even answer a lot of your questions about budgeting just by example.
All the major budgeting software applications have sample budget templates built right in – and if you can’t find one that matches your content type, just ask. You might even get a file from a friend who has done a similar project to the kind of content you’re producing. Just make sure they blank out all the identifying information from the budget before sharing.
If it’s a film or TV project, you can even pick a template based on the network or studio you’re working with – each will have its own preferred format and/or account codes. There are also variations of budget templates based on the film tax incentives you may be pursuing – but more on incentives in a bit.
2. Which comes first, the budget or the schedule? (It’s the schedule.)
When you’re budgeting to get financing approval or a network greenlight, of course you won’t have the production schedule yet. But once the project is a go, you’ll be a lot more accurate with your budget once the schedule is in place.
Why? Think about it. Until you’ve broken down the script (or outline for documentary content) and determined how many production days you’ll need in each location, you can’t very accurately budget the shoot.
Some locations are more expensive than others. Some are only available on nonconsecutive days, requiring you to wrap out, possibly travel to another location and return to set up all over again on the next available shoot day. (Avoid this if at all possible, but it happens.)
You also need to schedule actors, work out travel, get the right number of meals for each shoot day based on total crew, see when practical or weather effects are needed, etc. All these elements can greatly impact your budget, so the more you know in advance, the more likely you are to stay on track.
3. Look at film tax incentives before deciding on your shoot location(s).
Incentives for film production vary widely by state and even city, with some locales having amazing programs to reward you for shooting there, and others having none at all. If you have options for shoot location, it’s worth having a look around and comparing how different film tax incentives would impact your budget.
Our Showbiz Budgeting software has a nifty side-by-side budget comparison feature that makes it easy to see how different state incentive programs will impact the budget differently.
Even if you’re locked into a particular shooting location already, you might consult with film tax experts to see if there’s any incentive available right where you’re shooting. We’ve even seen a client get money back on a little-known state energy incentive that wasn’t specifically for the film industry, but legit and budget-friendly nonetheless.
With some incentive programs offering up to 30% returns for shooting in that particular state, they can definitely have a major effect on the bottom line.
4. Don’t forget the fringes.
What are fringes when it comes to media production?
“Fringes” in film, TV, commercial and new media production are employer-paid taxes, fees and health / pension plan contributions that are paid to outside agencies on top of your crew’s wages. Each fringe usually takes the form of a percentage of the wages paid to crew and cast on a production; thus you may see them referred to as “fringe rates.”
There are payroll tax fringes, workers’ comp, payroll handling fees and union fringes (such as SAG-AFTRA pension health and welfare). While these ultimately go to various outside entities (state and federal government, the union, etc.), they are generally collected and remitted on your behalf by your production payroll service.
For payroll and other fringe rates, talk to an expert.
5. Recognize ceilings for accurate production budgets.
What’s a ceiling or “cutoff” in a budget?
Ceilings are an important concept for accurate budgeting on a film or new media project. When a fringe or other fee has a ceiling on it, this means you will only pay up to that point and then not be charged anymore. In production payroll, ceilings are usually expressed as the top base amount on which the fringe will be charged, rather than a ceiling on the fringe amount itself.
For example: the Federal Unemployment Tax Act (FUTA to its friends) currently has an effective fringe rate of 0.6%. But it also has a ceiling of $7,000. So 0.6% will be charged on all your crew members’ wages… but only up to $7,000 in wages per crew member.
So say you have someone making $50,000 over the course of your production – could be an actor, DP, producer, whomever. That FUTA fringe alone would add up to $300 (.006 x $50,000 – trust us, we’re payroll nerds)… EXCEPT that there’s that $7,000 ceiling on it. So the actual amount would be only $42 (.006 x $7,000)! Ceilings are our friends.
The point is, those ceilings / cutoffs can make a huge difference in your budget when properly applied. Be sure to do it! Showbiz Budgeting allows you to create groups like “NY Fringes” and apply them globally to any categories you want.
With these tips in place and a little guidance, you’ll be on your way to creating airtight budgets for your content production in no time.
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