Anna Keizer
January 22, 2023

How to Manage Cash Flow and Your PO Log

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Astute financial management such as a detailed cash flow record and PO log is a must when you’re handling a production budget. Whether it’s a film budget, commercial budget, or even a photoshoot budget; you need to know where your money is going. 

Are you the UPM, production accountant, or producer who’s been tasked with overseeing your production cash flow? If so, now’s not the time to just “wing it” when it comes to the film’s budget. To have a successful production, you must manage those funds with the consistent and comprehensive handling of your cash flow log and PO log.

We’ve all heard the stories of films going insanely over-budget–Cleopatra, anyone?–which can make a movie come to a screeching halt. That’s why it’s critical for you to have an iron-clad handle on the management of your movie costs from day one. 

The good news is that we’re here to help you do just that. 

Using the Wrapbook cash flow template and PO log

Before we begin, download Wrapbook’s cash flow template and PO log template

Cash Flow Template - Wrapbook - Inline Ad

Cash flow logs and purchase order logs are essential for production accounting and should be used at the outset of a production all the way through to the conclusion of it. Accounting for every production cost as it occurs minimizes expenses getting overlooked and allows for efficient and accurate wrap reports.

PO Log Template - Wrapbook - Inline Ad

Make these essential tools your go-to financial management aids. With them, you can better ensure that your budget stretches from development to distribution with few hiccups.

Allocating funds across stages of film production

You probably know the fundamental broad strokes of how to create a film budget.  The question we want to answer is: “how should I allocate those funds across the different stages of production?”

Development

During development, the script is finding its final form–or at least final enough for filmmakers to secure funding with it. Sunding streams are secured, the preliminary budget is set, and a projected schedule drawn up.  

How to Manage your Production Cash Flow and PO Log - Wrapbook - Filmmaking
To better understand the breakdown of your cash log template, you first need to know the breakdown of the filmmaking process.

On occasion, a director might become attached at this stage. This will not be relevant for your PO as payment and official hire wait for the greenlight.

Pre-production

Once that funding is secured and the green light given, pre-production begins. You officially hire the director along with other key crew positions

Actors are cast, the principal photography schedule is finalized, and the overall production budget is loosely allocated across the different filmmaking stages to come. 

Rehearsals may take place during this stage as well. If so, it will require payment for rehearsal space, everyone’s time, and, as always, crafty.

Principal photography

Lights, camera, action! 

The fun part of filmmaking. Also the most expensive part of filmmaking.

The crew and cast must be paid. Locations rented. Sets, props, and costumes made or bought. Craft services provided every day. And that’s just the basics. You may have stunts to coordinate, prop cars to rent, and studio teachers to pay. 

It will all add up quickly, so this is where you need to monitor your spend like a hawk. Fill out your paperwork and make sure your accountants always know where the money is and how much is left.

Post-production

Post-production is when you hire the editor, composer, and sound designer.  Pending the intended release date, post-production may overlap with principal photography, as you start editing before you finish the shoot.

Note that unless these professionals prefer their at-home studios, you will have to pay to rent editing bays, sound bays, and other required equipment.

Distribution

Given the plethora of distribution options available to filmmakers, the expense of it depends on what route you take. More traditional distribution models place the initial expense onus on the distributor. 

But if you’re intending to independently go the film festival route or market it independently with the hope of getting picked up for distribution or an outright sale, you again will be funding it through your production budget.

Break down your script to assess budget allotment 

 The big key to production cash flow and PO log success on any project is a thorough script breakdown.

A comprehensive script breakdown  will become your primary blueprint when it comes to cash flow allocation. You will determine a number of budgetary items during this process. Including, but not limited to:

  1. Number of total filming days for crew
  2. Number of individual filming days for principal cast
  3. Number of needed locations
  4. Number of needed sets and props
  5. Number of needed costumes
  6. Equipment to be rented or bought

As you do a script breakdown, it helps to use film budgeting software that can quickly organize your numbers and give you realtime breakdowns of where your budget is going. 

Your script breakdown will offer a detailed assessment of where your dollars are being spent during principal photography. With that number determined, you’ll also know what you have left for the other filmmaking stages. As mentioned, these phases too can come with considerable expenses.

Script Breakdown Template - Wrapbook - Inline Ad

But here’s the thing. Even the most experienced UPMs, production accountants, and producers may not adhere to every part of their initial production budget. Life happens. 

Unexpected events like the lead actor getting sick, a suddenly unavailable location, or a broken down camera can happen. Not just can happen, WILL happen.

Which is why no matter how confident you are in your budget, you should always allocate a percentage of it to those unexpected emergencies that will happen at any and possibly all stages of your production. 

When you agree  to manage the production cash flow and PO log, be sure to account for all things big and small that can throw off the management of them. That’s why the job is called “accounting”.  You’re accounting for every expense.

What should you include in your cash flow record?

With an efficient cash flow management process, you can track daily your filming expenses and know exactly the funds you have on hand at any given time for each stage of your production. 

To maintain a comprehensive and organized cash flow record, make sure it includes the following information:

  • Overall daily expenses
  • Each expense’s category head (e.g. talent, equipment, travel, editorial, etc.)
  • Stage of production during which the expense was incurred 
  • Difference variable (i.e. the difference between what was budgeted vs. what was spent)

And don’t forget all those expenses that are easy to overlook even as you create your script breakdown. This can include essentials like travel costs and production insurance.

What should you include in your PO log?

The purpose of a PO log or purchase log is to track the payment details for every translation for the duration of your production. With the right data inputted, a PO log should be able to answer the following questions:

  • Who was paid?
  • When were they paid?
  • How were they paid?
  • From what account were they paid?
  • For what purpose were they paid?
How to Manage your Production Cash Flow and PO Log - Wrapbook - Office Work
Don’t be that UPM or producer who holds up a production because you didn’t properly manage it with a proper cash flow log and purchase order log.

But how to fill out a production PO log? To ensure you can answer these questions, you must include all of the following information on all PO logs:

  • Purchase order number
  • PO issuance date
  • Type of purchase or payment made (e.g. payment to talent, purchase of filming equipment, etc.)
  • Name of the company or individual to whom payment was made (i.e. the payee)
  • Total amount paid
  • Method of payment (e.g. petty cash production, check, wire transfer, credit/debit card, etc.)
  • Completed payment or pending payment (marked as “to pay”)
  • Voided or returned section to indicate canceled checks or credited funds

Benefits of maintaining clear records

By managing your cash flow efficiently with our purchase order log template, you can enjoy the following benefits:

Eliminate cash flow stoppages

At the top of this list is not running out of cash! You might have several objectives as the UPM, production accountant, or producer on a project, but there’s nothing more important than always having funds.

How to Manage your Production Cash Flow and PO Log - Wrapbook - Uncle Pennybags
Don’t be that UPM or producer who holds up a production because you didn’t properly manage it with a proper cash flow log and purchase order log. SOURCE

With organized cash flow records and updated PO log or purchase log, you are far less likely to mismanage those funds, overspend, or just run out of cash before you get to that filmmaking finish line.

Pay cast and crew on time

Nothing will sink a production faster than an unhappy cast and crew. Nothing makes them less happy than not getting paid! Don’t make the grave error of mismanaging funds to the point where they don’t get their paycheck on time every time. 

Acquire the equipment and locations you want

Who's going to tell your cinematographer that you no longer can rent that camera they needed because you misallocated the funds for it? Or that you lost out on a location because the deposit wasn’t paid on time? If a circumstance arises where there is a location or equipment mishap, make sure it’s not because of purchase log issues. 

Gain professional peace of mind

The least of your worries on a production is, well, worry. Even under the best of circumstances, making a film is stressful. But the last thing you want is your cast and crew whispering about your mismanagement.

Your professional reputation is the difference between a career in film and your backup job. 

How to Manage your Production Cash Flow and PO Log - Wrapbook - Waiter
Did you have a production shut down because of your poor cash flow or PO log management? Welcome to your new career! SOURCE

Maintaining your cash flow records and PO log or purchase log means having people look up to you for your budgetary and organization skills. And that means the security – as much security as there can be in this business – of future work.

How to deal with cash flow gaps

Cash flow gaps may still occur during a production because film financiers typically follow an incremental payment process. The film producer receives funding in installments of varying ratios depending on the lender. As a result, what you receive may not cover what you need.

Given the incremental inflow of funds, producers are often required to spend on production necessities before receiving their next installment. But if you are a project’s producer or accountant, it’s your responsibility to anticipate these problems and resolve potential cash flow gaps. In such cases, you may need to secure a loan until the next financing payment kicks in.

If you seek out a bridge loan, your production cash flow records and PO log may be the deciding factors in you receiving it. Do not drop the ball on these critical responsibilities. 

Wrapping up

An updated cash flow record and clear PO log or purchase log are essential tools you need to track how you spend your film budget. 

While it sounds simple enough, you can quickly drown under the fast and furious expense requests you receive from the moment your production gets the green light. But Wrapbook’s cash flow log template and purchase order log template can make sure you don’t sink under the weight of those requests.  

And because payroll in particular is such a prominent part of any film’s budget, it’s imperative that you avoid any mistakes or oversights that could upset your cast and crew or even land you in legal trouble because of accidental noncompliance.

That’s again where Wrapbook comes in. Not only will you see payroll spending in real time on a production, but also you’ll have peace of mind from us handling all the nitty gritty like payroll taxes, wage notice requirements, and blended overtime rates. You’re going to have a lot on your production budgeting plate, so let us make it easier for you to handle.

Disclaimer

At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice.  You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.

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About the Author

Anna Keizer

Anna Keizer originally hails from the Chicagoland area. After receiving her B.A. in Film/Video from Columbia College Chicago, she moved to California and finished her M.A. in Film Studies from Chapman University. She has also graduated from UCLA’s Writing for Television Professional Program and is currently in post-production on the short She Had It Coming, which she wrote and is executive producing.

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