Beginning January 1^st, 2023, the recently enacted Arizona Motion Picture Production Program will offer tax credits to qualified film, television and commercial productions that primarily film in the state.

House Bill 2156, which proposed amending the Arizona Revised Statutes to institute the program, passed the legislature in June and became law on July 6 without Gov. Doug Ducey’s signature.

The news, which the film office for Tucson and Pima County called a “colossal win for Arizona,” comes after years of studios and production companies choosing to film in neighboring states such as New Mexico, Nevada, Utah and California, which subsidize productions that take place there.

Vault Financials will apply for the films tax credit based on the AZ qualifications as an added paragraph. To find out what qualifies, go to: https://www.azcommerce.com/film-media/incentive/.

Read more about the tax credit: Why movie, TV filming is set to make a comeback in Arizona (azcentral.com)

Production accountant

Production accountants do all the things accountants do, but we do it on film locations amidst the buzz and creativity of making a movie. We calculate finances, work out the cost of a production, talk to the completion guarantor (an insurance policy to make sure the film is delivered on time and on budget) and control the cash flow, or spending.

In pre-production, production accountants help the producers and production managers prepare budgets and estimated final cost reports. During production, we oversee all payments, manage payroll, and provide daily or weekly cost reports. We also produce cost forecasts to evaluate the impact of any production changes.

Production accountants prepare a statement of account showing all income and expenditure for the producer or production company and the financiers. Depending on how the film is financed, we may also have to deal with bank finance and completion guarantors.

Film Distribution (P&A) accountant

Whether your film goes theatrical or straight to home entertainment, a film distribution (P&A) accountant manages the financial aspects related to the Prints and Advertising (P&A) expenses of a film. P&A expenses refer to the costs incurred for creating prints of the film and promoting it through advertising and marketing. Here’s a breakdown of what we as a P&A accountant might do:

1. Budgeting: We work on creating a budget for the Prints and Advertising expenses. This involves estimating the costs of creating physical copies of the film (prints) and planning the advertising and promotional campaigns. We also will generate a profit waterfall that explains to the client how they make there money back ranging from paying back distributors management fees, Investors P&A expense, MG’s, all the way down to the Producers until the film is put back on the shelf, Average life of a film project could be 20 years.
2. Expense Tracking: Once the film is released, we will track all the expenses related to prints (production, shipping, etc.) and advertising (TV spots, online ads, billboards, etc.). This involves meticulous record-keeping.
3. Financial Reporting: We generate financial reports detailing the P&A expenses. These reports are often shared with the production company, distributors, and other stakeholders. Clear financial reporting helps in assessing the performance of the marketing strategies.
4. Reconciliation: We reconcile the actual expenses with the budgeted amounts. If there are any discrepancies, we investigate and provide explanations.
5. Vendor Payments: We will manage and arrange payments to various vendors involved in the production of prints and the execution of advertising campaigns. This includes coordinating with printing companies, advertising agencies, and other service providers.
6. Contract Compliance: We ensure that all financial transactions and contracts related to P&A adhere to industry standards and agreements. This may involve negotiating terms with vendors and ensuring compliance with contractual obligations.

In essence, the P&A accountant plays a crucial role in managing the financial aspects of getting a film from the production phase to its audience, making sure that the distribution and marketing processes run smoothly and within budget.