People may not think of cash management as an artist’s tool, but no movie, play, TV show or concert tour can come to life without it. And in the complex world of media and entertainment production, finance can demand as much creativity as acting, singing, writing—any artistic pursuit. Having the right tools can make the difference between an all-around hit and a budgetary flop.
Cash Management Starts With Budgets and Systems for Managing Them
Cash management starts with your budget. Or, more specifically, budgets. First, there’s the overall production budget. From that, come secondary budgets for everything from props to payroll.
Once these budgets are set, you distribute and enforce them. And that’s where cash management for production differs from other businesses.
Specialized Software is the Key to a Successful Production Cash Management
Large budget items like location fees, and set rentals are often the easiest to budget and track. Though large sums of money are involved, you make relatively few payments. Much of this can be handled through your standard financial processes and bookkeeping systems. Payroll, too, involves large sums of money, but because of fluid scheduling and complex tax issues, that can get complicated. Software programs like GreenSlate and Wrapbook, are specifically designed to manage the unique budgeting needs for productions.
Managing Day-to-Day Spending Requires Uniquely Fast and Flexible Processes
Cash is always flying out the door during a production. Your crew needs props, wardrobes, equipment, and the like when they need it.
Some ventures can rely on a system of requisitions, approvals, purchase orders, and checks for spending. But during a fast-paced production, that can lead to intolerable (and expensive) delays…
Your Cash Management System Has to Allow Authorized People to Spend Easily
The best cash management systems for production use Visa or MasterCard to distribute funds and spend their budgets. Just about every vendor under the sun accepts them for payment. From coffee for the pre-pro meeting to equipment rentals and Internet storage, any production cost you cover with a Visa Card clears right away. You get what you need when you need it.
However, the cards by themselves don’t offer the tools you need to manage budgets. That’s why your backend software needs…
Technology to Enforce Budgets and Spending Rules
The best creative people rarely take a budget-first approach to production. They all wish they had a blank check. Generally, you don’t want to give people like these credit or debit cards. But in a fast-paced production, you must.
That’s why you need to sync your cash management system with the cards you distribute and manage all your production budgets from the same pool of funds or credit.
This lets you give out cards with individualized budgets and spending rules instead of credit limits. The rules can govern purchase limits, purchase times, merchant categories—the list goes on.
As designed, only purchases that adhere to the rules and don’t go over budget will clear. But at some point in the production, you will need…
The Flexibility to Adjust Budgets and Spending Rules on the Fly
In entertainment production, the only thing that’s predictable is that something unpredictable will happen. Equipment breaks. Stars get sick. That set you spent two days building doesn’t work creatively, and now everyone’s scrambling for a solution.
When the unpredictable happens, production accountants, just like creative teams, need to think on their feet. They have to move fast, adjust budgets on the fly, and make funds available immediately — all in the face of competing financial demands.
A good cash management system lets the production accountant or other authorized personnel log into the software, allocate funds, and make them available immediately….
Mobile App Access to the System Gives You the Greatest Flexibility
Ideally, your cash management software should be accessible through an administrator’s mobile app. So the producer or production accountant can shift budgets and authorize spending anytime and anywhere they happen to be.
Instantaneous Receipt Capture and Reporting
Once money is freed up for spending, the technology should capture the purchase information and alert administrators, in real-time. Now, cardholders need only to submit the receipts.
A mobile app for user’s can greatly accelerate this process. It can let users an capture receipts with their smartphone cameras, choose authorized accounting codes from a dropdown menu, and complete the report.
There are no loose scraps of paper to get lost. And since you have the details from the mobile app, there’s no need for a separate expense report. It saves everybody time.
As a bonus, your system could let you create easy-to-use tags that align with accounting codes. These might let the user submit a receipt and choose something like “Wardrobe John Doe,” from the dropdown menu, rather than some arcane accounting code like “WD7436.”
It’s a simple, no-brainer way to minimize mistakes. You can also use the system to…
Automate Backend Accounting Functions
Your cash management system should easily integrate with your bookkeeping system. This greatly simplifies back-office operations. And you can always pull up-to-the-second reports on budgets and spending with a few taps on a smartphone…
Eliminate Petty Cash Paperwork and Accounts Payable Bottlenecks
The best cash management systems, especially for production studios, need streamline approvals and provide visibility into and control of spending. If you have that, you can distribute cards as you see fit, without concern for fraud and misuse. If it’s all in your account, you may not even need to run a credit check.
You can give a card to any assistant or crew member without concern for fraud or abuse.The cards will only work when and how you authorize them to work.
If the production needs a last-minute prop, wardrobe accessory, or deli platter, you simply authorize the card to make the purchase. The crew member can then go to the store, make the purchase, and submit the receipt through the mobile app. It’s easier, safer, and more secure than having a petty cash box lying around.
You can also create individual Virtual Vendor Cards These are single-purpose card accounts that you can use for specific vendors, transactions, or series of transactions. They’re safer and more secure than checks and there’s no physical card to get lost or stolen.
But unlike general-purpose cards, you can control the use, paying only want you want to pay when you want to pay it. You assign your ledger codes to each card so every payment allocates and reconciles automatically.
Purpose-Built for What Productions Need
In short, a cash management system for production needs an unusual blend of speed, control, flexibility, and security. And these are all built into PEX. Schedule a demo today.