Production Accountants Get to Work in Hollywood

Production accounting jobs are sometimes referred to as ''Hollywood accounting'' and the person associated with this profession is responsible for the project accounting of the cost of film making. Production accountants actually calculate the exact time put down by each worker and also take care of the total indirect cost involved in the project. Sophisticated software has now been developed to aid production accountants in their work. Production accounting is the normal procedure of allocating the profits accrued from a large project to diverse corporate units. The above–mentioned procedure generally incorporates the resultant net profit and this net profit does not include the substantial margin. The whole practice is done in order to reduce the total quantity in the form of royalty fees or other expenses on the part of a big company.

The Functioning of Production Accounting

Production accounting jobs may assume numerous forms and, quite often, a small unit is created out of a big unit in order to do a given task. The parent unit, in turn, extorts the money from the child unit and this money is a charge for a particular service. This term may include the following costs:

1. Indirect Cost of Production: this cost is calculated using a figure say 15 percent of the total production cost.
2. Indirect Cost of Distribution: the distributors of the film normally hold a share from the total earning of a film in theaters.
3. Indirect Cost of Marketing: normally a lot of advertisement is involved in the publicity of a particular film and this is done in order to grab the attention of the audience. In return for this, studios may take some part of the advertising costs.
   

All the above-mentioned indirect costs are quite contentious and, owing to their controversial nature, percentages are assigned with each type. All the experts in this profession have to understand the dictums of bookkeeping, accountancy, and the costs of film making. They should have excellent organizational and numerical skills so that they can cope with the complexities of the film industry.

Pre-Requisites for Production Accountants

Production accountant jobs must consist of a good team player with superior communication skills so that he can tackle any issue very easily. A good team player is always ready to lend his/her ears for the grievances/suggestion of his/her teammates and will always motivate all the team members. If a production accountant possesses some great knowledge, the individual should effectively pass that information on to the subordinates and top managers.

In short projects production accountants are hired to take care of the accounting functions. In feature films a team of two or three production accountants is employed because feature films may entail crucial, complex processes. These accountants have to handle diverse requirements such as budgeting requirements, payroll needs, taxes, and necessary claims of insurance.

They all are liable to take care of the billing requirements and they must have proper detailing of whether all bills are being paid or not. They also have to maintain a track record of all financing needs during the course of the film-making process.

Production accountants work closely with film producers and their job responsibilities revolve around maintaining proper schedules and financial reporting on a daily basis in accordance with the estimated budget. Production accountants can also be hired on a freelance basis, and these professionals usually have a diploma in accounting. If they possess experience in this line, it will also help in the long run. During pre-production periods, they assist the producers and production team in order to help them out in budgeting requirements.

Responsibility of a Production Accountant

Production accountants are responsible for preparing cash flows and they also supervise the activities of trainees and assistant production accountants. Sometimes the production accountants have to deal with bank finance and completion guarantors. They have to maintain a record of financial needs during the film-making process. They should also make good arrangements for auditing functions. Production accountants also work with financial controllers and these financial controllers are also hired by production team in order to assist production accountants.

Production accountants have to look after all the contingencies and formulate a plan in order to meet unforeseen realities of the future. They make good financial management schemes and negotiate with diverse financial institutions in order to come up with a final conclusion in which they offer good suggestions pertaining to financial requirements. They check whether all the creditors are being paid on time and also make adjustments in the budgetary systems so that all the problems can be solved.

Production accountants prepare the final-cost report with due consideration of all the necessary paperwork. After the analysis a final report, the cost of production is prepared. They also prepare a statement that depicts all the record of income and expenses during the production process. The job of production accounting may involve crucial steps and a person learns through experience and proper training so that they can become familiar with the know-how of this job.

Important Resource

Production accountants also redeploy the capital strategically in the event of an emergency. They also evaluate the variances, if any, after which all the evaluations are presented before the final production team. The scope of production accounting is vast and it includes the preparation of the budget on a daily basis. These accountants also observe the other financial needs of the company.
Production accountants work in close collaboration with the whole team and are committed to prepare a suitable financial plan so that if any contingency occurs it can be corrected immediately.