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Financial Considerations During Pre-Production and Production

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Pre-Production

Pre-Production is the one stage of the process where money doesn’t really matter. Psych! It’s still really important, only now it comes with even more paperwork and headaches. About that paperwork – a lot of it will be contracts relating to money you’ve raised (and probably are still raising) for production. Because contracts are just binding agreements, it’s important to be clear about who is agreeing to what. So get everyone to agree to everything you want – simple, right? The “who” probably matters more than you think: you want to feel comfortable with anyone who becomes your business partner on this project. Otherwise, your relationship will probably end in a courtroom.

Do You Have the Money?

If you’ve raised any money, you want to know when you can actually start to spend it. Pre-Production is when you need to hire essential cast and crew members; to do that, you’ll need to be able to pay them something. So make sure there’s money in your account to do this! Experienced financiers will make you sign all the necessary contracts before they send you any checks. Even if you “have” the money, you won’t actually have it until those checks have been deposited into your production account – which you have clearly set up by now, right?

Accounting

So yeah, the production accountant should handle a lot of the paperwork and payments. That’s assuming you can afford a production accountant, though theoretically good accountants pay for themselves. If you can’t find an experienced production accountant, you’ll have to learn the ropes yourself or figure out which member of your existing team is the most capable. Organization may be a good life skill, but it doesn’t immediately jump to mind when we think about the creative types.


Probably you.

If you don’t have a production accountant, whoever put the budget together is probably the most logical candidate. After all, you’d be finalizing the budget for production anyway. You also want to be sure to sign the production to a payroll company, so that people actually get paid for their work. And if you haven’t opened accounts with any vendors for the equipment and services your production needs, now is the time to get on top of that. All of that probably sounds miserable to you…maybe you want to make the space in your budget for that production accountant after all?

Bridge Loans

Productions with extremely low budgets don’t really have to worry about bridge loans. Generally, you’ll need a letter of intent from a distributor to qualify for a bridge loan. If you already have legitimate distribution at this point, you are way ahead of the game and probably better funded than you think. Of course, if you’re a little fish with some bigger financiers in the water, you can always float the idea by them. At the very least, they’ll be impressed by the fact that you know what this is, or at least can convincingly pretend to know.

Production

So you will be burning through a lot of the money you’ve raised for production. Remember though that this is not the final stage of the project, and that post-production comes with its own price tag. Make sure that someone on the production team has enough financial sense not to max out the budget by the last day of shooting…and definitely not before then.

Is There Still Enough Money?

The project’s budget is set. Or at least it is until you start actually showing up on the production set and everything goes to hell. It’s always tempting to dip into the post-production piggy bank to start covering the overages. Again, the project needs a budget for post, especially if you’ve already hired an editor with promise of payment. However, if you do have to raid the funds, there may be a way to raise some more. Financiers will feel there’s a lot less risk if a project is closer to completion, especially if that footage is looking real good to them. It’s definitely a gamble, but so is pretty much everything else involved with filmmaking. Of course, if that footage looks grainy or needs a lot of fixing in post that you don’t have the money for…well, there’s a reason you planned that budget out in the first place, right?

Accounting

Although you may have a production accountant, the producer should submit cost reports during production. In fact, it’s one of their main responsibilities, so if your producer is just there to mingle with the cast and crew you better hope the PA is really good at math. As to all that money you’re spending, most of it is paying people and companies for services and goods. You’ve probably heard of the internet, but did you know that there are ways to send money online? And only two-thirds of them are “Nigerian prince” scams! Some banks will let you do this for little to no cost, so do some research to figure out which ones have the lowest fees. To help keep track of all the spending, it’s also a good idea to have a purchase order (PO) system. And yes, you can do these over the internet – in fact, most digital PO systems are just a slightly more technical version of what you do on Amazon at least three times a week. Some areas of the production will allow for a little more slack and even outright slacking off. Paying for stuff generally isn’t one of those.

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