4 Reasons to Outsource Production Accounting
This article is from the quarterly Canadian Overview, a newsletter produced by the Canadian member firms of Moore Stephens North America. These articles are meant to pursue our mission of being the best partner in your success by keeping you aware of the latest business news.
Whether in theatre, music, television or film, surrounding yourself with a good administrative team is vital, and one of the many key roles is that of production accountant. As the one who coordinates your budgets, grants, financing, team pay and all contingencies, your production accountant is central to your projects’ success and profitability.
Although finding a good production accountant has always been important, these days they are imperative. At a time when resources are scarce and difficult to access, a simple and effective solution is to outsource this role. However, some organizations remain hesitant about entrusting these types of tasks and responsibilities to someone outside the organization and are more comfortable with an existing team member.
To help you make the right decision for your projects and your company, here are four strong reasons that will convince you that entrusting your production accounting to someone outside the organization can be a good option.
Benefit from an expert with extensive experience in the industry
One positive aspect of entrusting your project accounting to an outside production accountant is that you can benefit from the accountant’s rich and varied experience! Indeed, outside production accountants have the chance to work on many productions of various types: theatre productions, music recordings, films, television shows, documentaries, etc. In addition, they have also worked on productions of various sizes, co-productions, international projects, etc. In short, they have seen it all!
This variety of experience allows your outside accountant to help you with a range of tasks such as:
- Helping draw up a production budget;
- Taking care of financing applications with the financial institution, providing requested reports (cash flow, monthly tracking reports, expense requests) and following up as needed;
- Monitoring the production cost budget;
- Making payments and calculating various payments and union dues;
- Providing relevant management information to enable the management team to make decisions;
- Preparing final cost reports, and reports on workforce and eligible costs for tax credit applications;
- Drafting grant applications and drawing up their final reports;
- Developing various personalized monitoring tools to respond to different internal requests.
Better management of volume fluctuations
By using an outside production accountant only when the need arises, you can optimize your expense management and make significant savings since you generally do not need to employ a full-time accountant when you are not in production. Working with a partner who adjusts to such periods of fluctuation and who is available whenever you need them takes a great financial burden off your shoulders. Outside production accountants will also handle your information with the greatest level of confidentiality. If you have any concerns or if certain information is extremely sensitive, you can also ask them to sign a confidentiality agreement for greater security.
Enjoy a broader vision of your activities
Since some of your accounting and financial needs are already entrusted to external experts, such as auditing your financial statements, tax compliance and optimization tasks, etc., adding production accounting to these numerous services only allows the team in charge of your activities to better support and advise you on your company’s financial management.
This means that all aspects of your productions will be taken care of at every level. The entire process will be covered, from handling your cost reports, to applying for tax credits, to following up with tax authorities. When you know that all these aspects of your projects are in good hands, you can concentrate on your production and on keeping it running smoothly.
Take advantage of a team that is up-to-date on best practises
During quieter periods, external production accountants are called upon to work on tasks from other companies in a variety of industries. Since they have access to other accounting practises, outside experts stay up-to-date and informed, and maintain a broad range of skills that help them with all their jobs. They also complete annual training in order to keep up-to-date with any changes that may be made to various regulations and to stay abreast of new developments in available tax credits and grants.
Offering economic, logistical and qualitative advantages, you should absolutely consider outsourcing as a solution if your financial performance is central to your strategy, or if hiring and training are significant challenges.
For any question, please feel free to contact our expert.