Essential Advice for Production Accounting in Short Films: A Guide by Film in Ireland
Making a short film is an exciting endeavour, but it comes with its own set of financial challenges and potential pitfalls. Working with seasoned production accountants, we’ve gathered valuable advice that can make the financial aspect of your short film smoother and more organised. From setting up separate bank accounts to handling expenses and complying with legal requirements, here’s a comprehensive guide to production accounting for short films. The cool thing is that these also apply to feature films so that when you make to step-up, you’ll have all the skills and learnings to do so!
1. Open a Separate Bank Account:
When embarking on your short film project, open a dedicated bank account for all financial transactions related to the film. Even if funding entities mandate this, it’s a good practice for easy tracking. Make every payment from this account to simplify cost reporting at the project’s conclusion.
2. Timely Bank Account Setup:
Banks can be slow, so ensure your production bank account is set up well in advance. This is crucial, especially if you have to make payments, such as insurance, before receiving funding.
3. Proper Invoice Receipts:
Obtain proper invoice receipts in the name of the company for all expenses. This is a legal requirement for companies, and it’s essential for accurate record-keeping and potential reimbursement of VAT.
4. Expense Tracking:
Be mindful of what expenses can be claimed back for VAT. The Revenue website is a useful resource for figuring out which expenses are eligible for VAT refund. With a short film , the focus is often on essentials like food and drink, and accommodation which you can’t claim VAT back on.
5. Avoid Cash Transactions:
Revenue dislikes cash transactions, so minimise paying in cash. Use debit cards or services like Revolut for petty cash expenses. Avoid paying individuals in cash to steer clear of potential auditing issues down the road.
6. Separation of Personal and Company Finances:
Treat your film production company as a separate legal entity. Fulfil statutory obligations as a company director, including timely filing of returns with the company’s registration office and the Revenue Commissioners. This is really important.
7. Nil Returns:
Even if your company lies dormant between projects, file nil returns on time to maintain audit exemption. Failure to file on time can result in significant penalties, it could also make you ineligible for Section 481, tax incentive, when you’re making your feature film.
8. Learn from Short Film Processes:
Treat your short film production as a learning opportunity in terms of your accounts and your business. The processes are similar to making a feature film, so use this experience to establish organised records and systems for future, larger projects.
9. Public Funding Responsibilities:
If you’ve received public funding, be diligent in keeping proper records. Public money often comes with reporting requirements, and maintaining transparency is crucial. Keep your files stored safely down the road, in digital and in paper form.
10. Budget Tracking:
Monitor your costs diligently. Keep all expenditures from a single bank account, making it easier to track expenses against your budget. Regularly assess your spending to ensure you stay within your allocated funds.
11. Prepare for Uncertainties:
In the film industry, uncertainties are common. Establishing a robust accounting system during your short film production will serve you well in navigating future financial challenges.
Making a short film involves not just creative passion but also financial acumen – excel at both! By following these production accounting tips, you can ensure that your short film project stays on budget, meets legal obligations, and sets the groundwork for successful future endeavours and future films of scale. Remember, meticulous financial management is a key component of a successful film production journey.