Balancing the Books – The Financial Side of Filmmaking

Film is an industry about making dreams into realities. We come up with these ideas, and we translate them into something real, something tangible for other people to enjoy. But whilst we all love to think about the creative side of filmmaking when the industry is discussed we often neglect to talk about the important practical side. It’s good to have great ideas, but what sets apart a filmmaker is the ability to take those ideas and make a product from it; that too often gets glossed over. Well, here at The Filmmaker’s Podcast, we’re all about exploring the real-life practicalities of filmmaking, and that’s why today we’re going to shine our light on what’s might be the single most important thing in a film that nobody wants to talk about – managing the financials and balancing the budgets.

Who Decides a Film’s Budget?

To understand how film budgets work, first, we have to look at exactly who provides the money for a film to be made in the first place. That means we need to understand the basics of the interactions between production companies and financial institutions.

The majority of filmmakers out there are part of a “production company”. Maybe they’re in it on their own just for administration’s sake, maybe they’re part of a whole group of people working towards a common filmmaking goal, but it’s a standard of the industry. A production company’s job is just that – to produce (in the most literal sense) a finished film to be released, but they don’t normally do that with their own money. Professional filmmaking is an expensive business – even a ten-minute short film can run into the thousands of pounds, and half a million can be considered a very limited amount of money if you want to produce something of the quality we’ve come to expect from a film. So, before you even touch the idea of marketing and distribution, you can be looking at films costs from no to micro budgets (anything from £20k to £100k) to well over a million pounds (for indie and studio films) to even produce a quality film. There aren’t a huge number of filmmakers that have that sort of cash to hand, and the ones that do have are usually already famous. For the rest of us, we have to find a source for those funds, and that’s where financial institutions come into the mix. There’s no specific definition of what constitutes a “financial institution”; it’s often one of the big, old original production companies who’ve made their business out of funding other filmmakers’ ideas (think about how many films you’ve seen the Paramount logo in the opening reel of – they haven’t come up with all those ideas in-house), but it can be anything from individual investors to government grants to even the rare bank loan. It’s just a term to describe someone willing to put money in to ensure that a film gets made, in exchange for a share of the pie once it comes out of the oven. These are the people that decide how much money a film has to play with. Sometimes a filmmaker will go to them with a detailed proposal spelling out how much the film will cost down to the penny, sometimes they’ll pitch an idea that the company will pick up and offer an amount of their own decision – the processes vary. But they’re the people who’ll look at the stats, do the earnings projections and revenue analyses (or not, as the case may be), and decide how much of the money they’ve got saved up is worth risking on your particular film for the rewards it might offer. But whilst they may decide the overall money allowed to be spent, they’re not the people implementing it “on the ground”. So, who’s dealing with the details of the finances of the filmmaking itself, and how’re they doing it?

Managing a Film’s Finances

The job of making sure that a film comes in on time, to budget, and with everyone paid falls, perhaps unsurprisingly, on the shoulders of the producers running the show and the Line Producer. It’s the job of a producer to make sure that a film actually gets made, and part of that is ensuring that the money’s in the right places at the right time. With all the moving parts that go into making each individual film, that’s no easy task.

You can broadly categorise most of the on-set expenses of films into 3 Ws – Who, What, and Where? The “Who” is, along with a seminal 70s rock band, the most obvious of the bunch; to make a film, you need people, and those people need to be paid. Actors, directors, gaffers, grips, makeup, costume, PAs and all – everyone’s got to be paid what they’ve negotiated on time and to the right accounts. The “What” is the physical side of things; camera rental (because those things are expensive), props budget, costume kit, and so on – everything you need to turn a bunch of actors performing in a space into an actual film in progress. Then you’ve got to figure out how you’re going to get that space and get all those Whos and Whats to Where you need them. The right location for the shoot has to be found, it’s got to be booked, transport has to be arranged for your equipment and everyone that operates it, you’ve got to find accommodation for those people; the producers might not be directly in charge of every element of that process, but they’re the ones making sure all those individual expenses add up to the right sums and ensuring the payments go through. So, as you can imagine, they’ve got a lot of things to keep track of in their budget, and a lot of payments to put through. How do you keep up?

Well, there are two ways, really – the traditional way, and the modern one. The “traditional” way involves a lot of spreadsheets, a detailed address book, and a very, very attentively crafted calendar. It’s not unheard of for there to be literal boxes of receipts that need to be dealt with over the course of making a film. Let’s just take a moment to emphasise that again – think about the size of your average box. Now think about just how thin a receipt is. Now think about just how many receipts you’d need to fill a single box, let alone multiple. Yeah. That’s a lot to keep track of. The traditional financially-focused producer has an obsession with bookkeeping to match the best forensic accountant, and their head in the numbers to go with it. It’s a highly detail-oriented role, and the people that pull films off this way deserve our utmost respect for it.

But, times are changing in the film industry; the rise of technology and software services has seen the rise of film-specific pieces of financial technology designed to make managing all those bits and pieces a lot easier by integrating them all into software platforms. From our own experience, we can say that it makes things much easier when you can look at all your expenses in one place, and see what’s paid and what’s still to be paid, and who’s responsible for that, and have new expenses entered with just a few button clicks rather than having to play a game of whispers about who’s spent what and where. There’s a whole bunch of software options out there, but for our part we’re fond of Soldo[i], since it’s got a great blend of easy-to-use interface for basic use, letting you know who’s spending, and what they’re spending on quickly and easily, but still has the deep-diving capabilities you need for proper financial tracking and analysis. Trust us – when you’ve got 100 other things to think about at once, like every filmmaker does, having something like Soldo to ensure that there’s at least one of them you know is being properly handled is a blessing in disguise – and we need as many of those as we can get in filmmaking!

We could speak for hours about how you handle the financials in the filmmaking world – as a matter of fact, we’ve done so! If you’re interested in finding out more about exactly how the money flows in the film world from vision to reality, and all the various new ways that are springing up for it to do so, we’d recommend checking out our episodes with Peter Dunphy, Orlando Pedregosa, and Shaked Berenson, among plenty of others!

[i] Because we’re fond of full disclosure, Soldo is a sponsor of The Filmmaker’s Podcast, but we’re not being paid to make this blog, and it’s a genuine recommendation from our experience.

If you use the links we provide to sign up for Soldo, we do receive financial benefits. Get 3 months FREE Soldo using the code ‘FILMMAKERSPOD’.

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