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Production Accounting in the Age of COVID-19

Original publish date: July 10, 2020

One film department that’s had to scramble since the COVID-19 shutdowns began is the production accounting team. As film and TV shoots are rescheduled or relocated due to the pandemic, accountants are striving to keep their production budgets accurate, while also finding contactless solutions to start paperwork, timecards and petty cash.

In addition to these challenges, production accounting departments are also making room for whole new line items in their film budgets, for everything from PPE to COVID-19 testing to on-set medical specialists.

So what are some tips for production accountants trying to keep their budgets above water in these trying COVID-19 times?

Let’s take a look.

Production Accounting needs to be flexible to keep up with COVID.

One thing we can’t stress enough for production accounting during COVID-19 is flexibility. As we’ve seen too many times, states and even local production sites are susceptible to coronavirus shutdowns. This can happen even after the area has been given the green light to reopen.

Production accountants should work with their line producers to plan for this, by having two or three options for each filming location. Does that mean three times the work to gather costs for budget line items, based on the area?

Not necessarily: a sharp accounting team can create a film budget template and create alternate scenario budgets by simply tweaking the appropriate line items based on locale.

For example, while food and lodging is more expensive in Los Angeles than Louisville, some items such as mileage rate and federal fringes are largely fixed. If you find your contingency location budget saves some money, discuss those “found” funds with your producer. The UPM or network make the ultimate call on where to spend any windfall on a show, but it’s up to the production accounting unit to bring them to their attention.

Some film budgeting software, such as Movie Magic or our own Showbiz Budgeting, lets the production accountant set up globals to apply universally, while adjusting variables for the individual alternate budgets. Showbiz even lets you compare those alternate film budgets side-by-side, with a feature called Phases.

Speaking of alternate budgets and savings, here’s the next tip:

Build a COVID Contingency into the Production Budget

Production accounting for film, TV and other media projects has always been a calculated dance. As the production accountant, you know your producers want mainly “good” surprises. This could be a budget windfall at some point during principal photography which can be carried forward into post production, or may even mean an extra day to get that shot that was a “nice to have” but not a must for the show.

And how do seasoned production accountants deliver those good surprises? By doing their research, and including a decent contingency in the budget. Usually 10% or so, this line-item cushion allows for the little things that come up on production, which no one could have planned for. Also helps account for longer shoot days and more overtime / meal penalties than expected.

But with the COVID-19 pandemic throwing a major monkey wrench into the film production works, as they say in road construction: Expect delays.

COVID testing time is work time on production, as is taking temperatures, disinfecting surfaces, putting on masks, gloves and other PPE on set. It’s going to take longer to break the crew for meals, with staggered spaces and meal times, and longer to coordinate logistics while keeping film crews six feet apart.

The production accounting team should plan for the added costs which will necessarily ensue on their film and TV projects, by setting a realistic contingency with the producer. We’ve even seen some producers and production accountants doubling or tripling their typical contingency amount.

Other accountants have started using a COVID category in their budgets, which can add 15-20% to the bottom line. Better safe than sorry, when you’re dealing with the great unknown of this virus and the many COVID-19 production guidelines by state.

Accounting for COVID-19 Protection on Production

We’ve touched on personal protective equipment, or PPE, on the film set. Mask, gloves, testing, quarantined accommodations when necessary: the production accountant needs to build all these into the project’s budget.

Don’t go cheap here. Production Accounting may look like a hero scoring Big Al’s gently used latex gloves for half price, but no savings are worth jeopardizing the safety of the crew on a film shoot.

Not only that, but as we’ve seen in the age of COVID-19, the PPE market can fluctuate rapidly with supply and demand. Better to budget on the high end for quality PPE for your film crew, and be pleasantly surprised if you can get it for less than you thought.

Additional COVID-related budget line items for Production Accounting to consider

The industry white paper on production guidelines in the era of coronavirus calls for a COVID-19 Compliance Officer on set. This new position is to have specialized training in safety compliance and enforcement for keeping film sets safe from the disease.

Some film and TV productions are going a step further in bringing a full-time registered nurse on set. Beyond the payroll for these new roles, testing kits and thermometers are additional costs that need to be accounted for on production.

In fact, for accurate film budgets, the production accounting department is best served by talking to a specialty service for COVID-19 safety on set. Such services are cropping up quickly, with some pivoting from an already existing non-production health compliance service.

Usually for a flat fee per crew member, these set safety and health services can provide everything for a production: thermometers, testing kits, disinfection, registered nurse, COVID-19 Compliance Officer and PPE for the crew and cast.

This is a new era, and no production accountant will do this perfectly first time through. But if you plan carefully and communicate with your production team, you and your film project can weather the ups and downs of these uncertain times.

Need remote production accounting for your film or TV project? Reach out to us here.


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