Lucy Drake is an accountant with an IMDb (Internet Movie Database) profile.

She has worked on film and TV productions for the past 20 years, having started out in the BBC’s drama department. She originally did a degree in performing arts, but found herself handling the finances for the art centre that students ran as part of the course. She decided to move into accounting and studied with AAT before moving on to study with ICAEW. But, although she wanted to be an accountant, she also still wanted to work in the arts.

Production accounting was the ideal route. Production accounting is as much about film and TV production as it is about accounts. Some production accountants come through the production route and aren’t qualified in accounting. In fact, all production accountants start as assistants, regardless of accounting experience – it’s the only way to learn how a production works.

“You get to understand who everyone is on the production and how the production’s made,” Drake explains. “Then you step up to production accounting, which is when you do the forecasting and cost reporting.”

Production accounting involves the ability to take a script or story synopsis and understand what is required to turn it into the finished product, working closely with the producer and line producer, who bring in the funding and set initial budgets. “It’s that skill of being able to read a script and understand the financial implications of it, so you’re turning non-financial data into financial consequences. You’re translating for the producers, if you like,” she says.

“It’s the most useful qualification for this role, because it gives you good double-entry skills. You want a good foundation in all elements of accounting, and AAT provides that.”

Production accountants often need to come up with several ‘What if?’ scenarios. Drake gives the example of choosing whether to film in a studio or on location. Filming in a studio might be simpler, but it can be expensive. But, on location, you might have to book travel and hotels for the cast and crew, which can add up. “You’re looking at it editorially, but also from a practical and financial point of view,” says Drake. “You’re juggling all of those elements.”

Usually, a production accountant starts on a project once it’s got the green light and an initial budget is in place. If it’s a film, a special purpose vehicle (SPV) will be set up. This is a company with a specific and often temporary purpose. In the film industry, a company is set up for each film, grown very rapidly, and then shut down again. “When I start on a production, there’s usually myself, a producer and a line producer,” says Drake. “Then, within a few weeks, there’s a team of about 30. Then you start filming, and suddenly there’s 70 to 100 people there every day. So, literally within weeks, it cranks up from three people to over 100, and then they all disappear.”

Most of the people who work on a film or TV production, from the actors and director right down to the electricians, are freelancers. HMRC guidance outlines which positions can be classed as freelancer or sole-trader roles, and which can’t. Those that can’t need to be subject to PAYE. This makes payroll complex. “On one show people can be one thing, and they can be something else on another. Then some people are limited companies, which changes the argument,” says Drake. “Everyone who’s brought in, even if they’re PAYE, will effectively feel freelance. They’re just brought in for however many weeks or months, and then they all disappear. So they all need contracting individually, in line with what their job title is and their responsibilities. Getting their tax status right is very difficult.”

The production accountant’s situation is slightly different with factual or comedy programming. Th re, the role is more office-based and focused on management accounts. In the case of high-end drama and films, the role is much more hands-on, and usually involves much bigger teams. “If you look at something like the Star Wars films, you’ll have a financial controller, a production accountant, and then a team of maybe 15 assistants.”

Drake spends a lot of her time on set, as she has to keep in regular contact with people involved in the production. It makes you feel very much a part of the production team, she explains: “I do love being part of a production. I love working with people and I love the variety of work. I’m a film buff and a telly addict, so I love understanding and appreciating as a user what I’m working on.”

If this sort of role sounds up your street, now is a good time to look into it; there’s a massive shortage of assistant production accountants out there at the moment, and industry organisations such as the Production Accounting Forum and the Production Guild are seeking to attract new talent. Drake runs a training scheme for assistant production accountants through the guild. She says AAT students and members have the ideal skillset for production accounting.

“It’s the most useful qualification for this role, because it gives you good double-entry skills,” says Drake. “You want a good foundation in all elements of accounting, and AAT provides that.”

The role requires:

1. Knowledge of film production: this can be learned on the job while working as an assistant production accountant.

2. Good all-round accounting skills: the role involves bookkeeping, cost reporting, payroll, VAT and forecasting, so a solid foundation in accounting principles is ideal.

3. Great people skills: a film project hires a lot of people, and you will be working closely with many of them during script development and on set, particularly the producer and line producer.

4. Creative thinking: you need to be able to read a script and come up with cost-effective ways to bring it to life.

5. Top organisational skills: the payroll on a film project is a complicated beast. You need to keep track of a lot of cost threads.

Photo credit: Louise Haywood-Scheifer 

This piece was first published in Accounting Technician magazine. AAT members can login to the archive to read more of the March/April issue with great reads on Making Tax Digital and public trust in business.

Mark Rowland is a journalist and former editor of Accounting Technician and 20 magazine.