Sometimes, deep diving into your production finances can be intimidating. You may worry about what you’ll find if you’re not doing this regularly. But the truth is, it’s always better to be aware of your financial state (even if it’s not what you hoped) than to plug along day by day with fingers crossed.
We recommend producers have this trio of accounting reports at the ready: a Balance Sheet, Cost Report, and Cash Flow Projection. Here’s how these reports will empower you to make more profitable decisions.
BALANCE SHEET
A Balance Sheet provides a snapshot of the health of your company at a specific instance in time. This is not to be confused with a Profit and Loss Statement, which showcases the health of your company over a span of time.
Your Balance Sheet should accurately highlight your assets, liabilities, and equity. When you look at your balance sheet, you need to focus on not only what’s in your account but the entire picture.
When set up correctly, your Balance Sheet allows you to see:
- Any deposit left in your payroll account? Does it need to be replenished?
- What is the balance on the credit and CASHet cards?
- What is your cash position?
- What are your liabilities?
The right accountant will make sure you have a Balance Sheet set up properly so you can pull it up whenever you need it so you’re not left blindsided.
Here’s an inside look into a sample Balance Sheet our team created. By staying up to date on yours, you’ll clearly understand where your company or production is at and where it’s financially able to go.
COST REPORT
Your Cost Report is vital in monitoring the health of your productions. Yes, if you feel things aren’t going well, looking at this report might keep getting pushed to the bottom of your to-do list. Just remember that regularly monitoring your finances is always smarter than letting them slip.
A Cost Report should show your actual spending vs. your budget. Are you going to go over, or are you still on track? An accurate cost report will help you understand where your money is going and whether or not your budget is realistic.
Unfortunately, if you’re not using a clear system like we do at Prod Co Accountants, your Cost Report can take a long time to produce. And when you’re a producer, you don’t have time to go line by line, reconciling different accounts. The best accountants have a system that links your payroll, accounts payable, and credit card data together so you can pull a real time Cost Report anytime.
Take a look at this sample cost report to see a clear breakdown of the costs you might be tracking for each production.
CASH FLOW PROJECTION
Many producers opt for a Cash Flow that focuses solely on their show, since that is usually a report that a network requires to commission a show. Though this is nice to have, what you really need is a Cash Flow Projection that covers the health of your entire company. Visibility is key here.
Your Cash Flow Projection should act as a guide, showing you exactly how your money is expected to move in and out over time. It provides a real-time view of your production’s monetary dynamics beyond profits. Producers can make informed decisions, anticipate challenges, and seize opportunities by closely monitoring cash flow.
HERE is a template we use, along with a step-by-step tutorial of how to use it.
It’s normal to avoid looking at uncomfortable facts—but not conducive to long-term success. At Prod Co Accountants, we’re here to give you peace of mind, ensuring you understand how to make profitable decisions.
With us, your numbers are no longer a mystery. So, if you’re currently using multiple disparate softwares or systems that don’t talk to each other, it’s time to Line It Up. We promise things are never as scary as you might think!
Schedule a call with us today so we can help you create these three reports, equipping you with the insights needed to navigate the complex landscape of production.
