Film productions use petty cash to conveniently deal with small but necessary business expenses. The production’s accounting department can avoid disbursing a check every time a crewmember needs something by using a petty cash fund. In this post, we’ll provide some tips for controlling and tracking those petty cash funds.
Keep clean records
One of the best ways to control petty cash is by keeping clear records and paying close attention to spending. Records can be maintained digitally or by hand, but it’s often easier to use a digital petty cash solution. Online systems can provide live data about spending to administrators, which is helpful when determining the burn rate of a project. Digital systems also have robust measures in place to ensure that you never have to worry about losing any information relating to the real-time spend.
Designate one person to manage petty cash funds
You should designate one person to manage and hand out petty cash to crew members. That person should also be in charge of ensuring that proper documentation is maintained for each expense that is purchased with petty cash. When you keep a good record of petty cash, you can avoid fraud and unreasonable use of funds. This is where digital petty cash solutions like PYCO can really help. For example, crew members can log their expenses and upload pictures of receipts with PYCO as soon as purchases are made. This keeps the spending ledger accurate, and ensures that the petty cash manager will spend less time chasing down receipts and doing data entry. And everyone can feel good about writing off those expenses with ease during tax season.
Have a plan for all types of expenses
Established studios and production companies always have a process for evaluating and approving petty cash expenses. For indie filmmakers and smaller productions, you’ll need to think about creating your own petty cash approval system that makes sense for your project. For example, you can decide that purchases under $10 do not need written approval. Be sure to document this policy and share it with all your crew members!
The “petty” in petty cash is ironic
Never forget that petty cash expenses are an important part of the film’s financial record. In multiple states in the USA, petty cash purchases are considering qualifying purchases under tax credit programs. However, if these purchases go undocumented during production, they will also go unclaimed during tax time. That can be a significant loss when every penny counts on film productions.
Take a look at how you’re currently controlling petty cash, and if you’re looking for a digital solution that will help you stay organized, try PYCO. Contact us for a free trial!