Budgeting and Scheduling

Once the project has been given the go ahead, the funder will expect both a budget and a schedule for the production. The schedule will vary in length and complexity depending on the nature and size of the project and as soon as it has been prepared and agreed by the Producer, Director and Line Producer it will form the basis on which the budget is produced.  In television, the budget is usually prepared by the Producer, the Line Producer/PM or someone with the relevant expertise.

INITIAL CONSIDERATIONS

The list of initial considerations of relevance to the Production Accountant is such that no one set of rules is likely to cover all eventualities. In a situation where the Production Accountant starts working on a new production in pre-production then it is necessary to gain an overview of the

Production and the following matters are of immediate relevance:-

1) What is the subject matter and genre of the production; is it a series and how long is each finished programme?

2) You need access to the detailed budget and schedule for the production.

3) You need access to the funding plan: who provides the funding for the budget and when is the funding likely to be received, and what are the funders’ requirements from the production.

4) How the Producer / Financier require the accounts office to operate.

New Accountants Checklist

Bespoke TV/Film specific software is available for budgeting but a spreadsheet is also an effective budgeting tool.

In the UK, there are some standard formats for different genres of programme and, whilst many of the broadcasters use similar formats, it is worth ascertaining exactly what format is acceptable to the broadcaster/funder for which the production is being made for.

The following files detail common formats used.

ITV New Budget Template.xls

BBC Budget Template.xls

C4 Budget Template.xls

C5 Budget Template.xls

Netflix Budget Template.xls

The Production Accountant’s function usually is to assist by verifying that:

  • The budget is consistent with the schedule
  • There are no obvious omissions
  • Budget rates are reasonable
  • Fringes have been correctly applied etc

It would also be sensible to check all budget additions as ‘input errors’ can cause items to be excluded from the overall budget total.

The budget review is best completed by someone different from the person who created the original budget, as it is generally very hard to question your own logic. The rule of thumb when reviewing a budget is to read the synopsis and then try to think imaginatively of factors that might apply to that Production which are not reflected in the budget.  Experience is helpful in this process but even an inexperienced person can use common sense to imaginatively review a budget.  It must also be remembered that the purpose of the budget review is not only to identify un-budgeted or under-budgeted items; the review should also identify areas of the budget that may not be needed or which are over-prudent. Every production will have areas that go over-budget and it follows that the Line Producer/Production Manager need to make some budget savings to compensate for over-budget areas.

Whilst everyone will have their own method of budget review there are one or two things that every budget review should entail as follows:-

  • Overview – Look at the total budget figure and compare it to the budget for similar programmes or to the published tariff for that genre of programme (many broadcasters publish a guideline tariff on their website for each genre).   Look at the budget for each area of the budget and consider whether it instinctively feels right. Whilst this review is by no means an exact science it can focus your attention on specific areas (such as post-production) that merit further review.
  • Detailed Review – This part of the review entails looking at each line of the budget and deciding whether it is correctly costed and consistent with the schedule, the synopsis and other parts of the budget.
  • Integrity Review – Verify that the mathematical logic in the budget is correct so that it adds up, that all budgeted lines are included in the total budget and that all fringes have been correctly applied.  A fringe is an amount within the budget that is an automatic calculation based on the level of specific costs within a budget that attract certain additional charges.  For example, in the UK, national insurance costs depend on the level of salary paid to an employee and a national insurance fringe would therefore estimate the national insurance likely to be incurred on certain salaries which have been tagged as NI’able salaries.
  • Consistency Review – Do all budget lines tell the same story for the production?  If filming is for 6 weeks, then are all the filming costs budgeted for 6 weeks eg equipment hire, location fees, catering, crew etc.

Where a budget review indicates that a budget is unrealistic it is very important that this is addressed before going into production.   If a budget is inadequate then either additional funding must be found or the programme must be shot in a different way to enable it to be made for the budgeted sum. Pressing on regardless and hoping it all works out is not a sensible option! An under-budgeted Production is in trouble from day one!

BUDGETING BY GENRE

Factual/Documentary

To produce a factual genre budget, a synopsis of the programme or series with details of the delivery requirements are required. The synopsis should indicate where shooting is likely to take place, the length of each programme and what archive or music is likely to be used. The synopsis should also impart the ‘feel’ of the intended production. Are we dealing with a visually stunning production involving rolling aerial long-shots of beautiful scenery or is the programme likely to involve a lot of “talking heads”?

Having arrived at an overview of the production the next step is to decide on the production schedule. The simplest productions have the following phases:-

  • Development -when the production is researched, budgeted and funded
  • Pre-production – the preparation period that precedes the ‘production’ period
  • Production – when shooting occurs
  • Post-production – when editing occurs
  • Delivery – when the programme is delivered to the broadcaster along with delivery paperwork and the final cost report.

In reality, most productions have periods of overlap and often post-production work will take place at the same time as production work is taking place. Where a series is commissioned there will be periods where one programme is in pre-production whilst another is in post-production.

Having arrived at a sensible schedule, budgeting is now a matter of going through the standard format budget lines and using experience and knowledge of industry rates and procedures to arrive at a budget. Budgeting is very much a process of using experience and common sense to arrive at a sensible and workable budget figure.

Entertainment / Comedy

Entertainment and comedy can cover a wide spectrum of subjects such as magic, award shows, cookery or reality television shows. In principle, the budgeting process for such shows is much the same as for Factual programmes.

Drama / Scripted Comedy

Drama and scripted comedy are considered more complicated to budget than other genres but have the advantage of being script driven. The accurate way to budget is to analyse each scene in the script noting the location, the artists required, set requirements and anything with a cost implication. Having broken down the complete script the person compiling the budget needs to make decisions as to the most efficient order to shoot the drama in order to minimise the cost of production. Much of this process is driven by common sense or necessity. For example, where a specific location is required by the script it would usually be most cost effective to shoot all the scenes in this location together to minimise location hire costs and set dressing costs. Furthermore, a scene where a set is destroyed by fire would have to be shot after another scene using the same set before its destruction.

The schedule takes the form of a detailed daily shooting plan listing each day’s crew, artists, equipment and location requirements. Having drawn up this schedule the daily requirements have to be costed to arrive at the first-draft budget.

Animation/VFX

Animation and VFX is a specialist area and should only be budgeted by someone who understands the complete process and is aware of related costs.

BUDGETING TOP TIPS

Break every programme down into smaller parts

A factual series may consist of several different types of programmes. For example, an arts series may consist of three studio discussion programmes, six location shoots across the country and one theatre shoot. The person budgeting such a series needs to have a budget for each type of programme, a budget for central costs such as core staff and overheads and also must make an assumption as to numbers of each type of programme that will appear in the series.

Scripted programmes would need to be broken with reference to the final script and filming schedule.

Amort & Pattern Budgeting

US TV studios require Amort and Pattern budgeting and costing for multi-episodic commissions.

A Pattern budget is produced for the cost of one episode/block, and is repeated for the number of episodes/blocks commissioned.

The Amort costs are those not specifically related to the length of shooting, so if there is a change in the number of episodes/blocks, the amort costs remain the same.  These costs are then amortized across the Pattern (episode/block) costs.  So, if additional episodes are commissioned, the value of the amortization allocation per episode would decrease.

The cost report is required to summarise the results for each Pattern (episode/block) with the Amort costs amortized against each Pattern.

State assumptions

Key assumptions in a budget must be clearly stated so that the person reviewing the budget is able to challenge those assumptions, eg foreign exchange rates, number of shooting weeks, shooting locations.

Budget for the worst case scenario initially

A good budgeting method is to do a first-draft budget which includes everything the Director might wish for. This budget will generally be significantly higher than the funder is prepared to pay and discussions can then take place with the Producer, the funder and the Director to ascertain which areas of the budget can be reduced to arrive at a budget acceptable to all parties.

Budgeting for unknowns

It is very hard to budget for a programme unless a detailed synopsis of the programme is available. For example, where you are given a script or synopsis for one programme and asked to budget for a series based on that one script/synopsis then the budget must clearly state that the series budget assumes that each programme will cost a similar amount to the one detailed in the script/synopsis provided.

Another example of this scenario is commonly encountered when budgeting for magic shows. Many magic tricks require bespoke props, critical timing and long set-ups and unless the person budgeting the series has a full list of the proposed tricks supported by a magic expert’s costing of the props, with a detailed breakdown of the set-up required, the budgeting is very much guesswork. Assumptions must be clearly stated so that if a more expensive scenario is later demanded by the broadcaster then additional funding can be negotiated.

Use contingencies

Where there is uncertainty in a budget don’t be afraid to put in contingency allowances to cover uncertainties. An arrangement can be made with funders whereby the un-used part of a contingency is returned to the funder.

Obtain quotations where possible

If you don’t have the expertise to budget a specialist area then request quotations from experts in that field. VFX (visual effects), for example can generally only be budgeted by a VFX expert who understands the complete process.

Take a prudent approach

A good budget should always veer on the side of caution so budget allowances should ideally be on the generous side.

Budgeting for overseas currency transactions

When budgeting for foreign currency income or expenditure it is sensible to assume worst case scenario exchange rates (i.e. assume prudent rates of exchange).

Don’t try to budget a programme to a set figure

Where the person doing the budget wants the budget to be a set figure (because, for example the broadcaster has said this is what they will pay) then there is a danger that the budget loses objectivity. A budget should first be prepared based on the synopsis and then discussion should occur as to how that budget can be reconciled to the available finance.

Are actual deliverables consistent with the budget?

Each source of finance will have specific and contracted requirements as to delivery format and different versions for domestic/overseas sales etc and the Production Accountant needs to be confident that these are adequately provided for in the overall budget. It would also be sensible to have the contractual requirements reviewed and costed by a Post Production Supervisor or facility house just to ensure that the budgeted provisions are realistic. It is important that if the numbers need to be changed the Producers and funders should be made aware of this as soon as possible.