Most budgets split production costs into above-the-line, below-the-line and post-production sections. Some budgets may be divided further, but it’s a good idea to use at least these main segments:
Above-the-line (ATL) costs include the wages for the cast, producers, director(s) and writer(s). The costs associated with the development, rights and creation of the script are also in this section. Costs for adapting a script from some other source, such as a book or video game, would fall into this category as well. It’s important to diligently review this portion of the budget, as these fees are often contractually defined and strictly enforced. As we’ll see below, some other items in the budget are more flexible, but ATL costs are more likely to be steadfast.
Below-the-line (BTL) costs generally cover the bulk of the production expenses in terms of dollar amount. BTL costs include behind-the-scenes crew members like hair and makeup stylists, grips, camera operators, location managers and production accountants. This portion also covers expenses such as office and stage rentals, camera equipment, trucks, set dressing and construction materials.
most budgets contain dozens of smaller sections, usually called accounts, for specific costs that may be relevant to the movie or show. These accounts are usually separated by department. Each department’s account is then further separated into line items. For example, the property department may be given its own account number and within that account there may be a line item for the prop master, property assistants, property rentals, property purchases, a property trailer and so on. Each line item will have its own code number and budgeted amount, allowing the department, as well as the accountant and producers, to quantify how much they can spend on each item.
A carefully laid out budget is not worth much if the same attention is not paid to categorizing and reporting expenses as they come in.
When a department needs to make a rental or purchase, they will issue a PO to the vendor providing those goods or services. A copy of the PO also goes to the producers and the accountant and will include the account code and cost of the item. This allows the accounting and production teams to estimate the spending in real time, without having to wait for an invoice to arrive from the vendor, which may take days or weeks. A PO allows the cost to be recorded right away and avoids surprise costs down the line.
Production companies also commonly issue credit cards to crew members to make smaller purchases, such as lunches and office supplies. These credit cards can be linked directly to the accounting software to rapidly track expenses, depending on the software the project is using.
If the actual expenses of certain line items exceed the budgeted amount, the department head, accountant and producers need to work together to find a solution that satisfies creative and financial concerns. This may involve shifting money from other line items in the budget, or could be as drastic as cutting or rewriting scenes, depending on the scale of the overage.
When a department head suspects that a cost for a certain scene or location may differ substantially from their budgeted amount, they should notify the accountant and producers as soon as possible. This allows all parties more time to find a solution without risking delays to the shooting schedule, which can be incredibly costly in and of itself.
