In an ideal world, every small production company would be able to hire an entire executive board replete with their own dedicated CFO. You know, gathered around the table in a glass-walled skyscraper Succession-style boardroom.
However, the reality for most independent production companies is a bit more down to earth. It’s often not financially possible to have a whole internal department dedicated to the comings and goings of the company’s money. High-ranking financial managers aren’t cheap or easy to come by.
Freelancers are a possible solution - but that is a lot of responsibility to give to someone who could theoretically leave at any time. There is, however, an intermediary option: hiring out-of-house accountants who do more than just accounting. They help crystallize how to reap the benefits while overcoming the challenges of working with out-of-house accountants.
If a full-time CFO is beyond your production company’s means, out-of-house accountants might be the perfect solution to your financial woes. Let’s look at some of the benefits of this option.
With out-of-house accountants, you gain 100% of their experience at roughly 15% to 20% of a full-time CFO’s salary. If you own a small production company, you likely don’t need an entire accounting department with a CFO, controller, and support staff.
These can cost upwards of $400,000 annually.
But you do need – and will receive – sophisticated reporting and strategic input from an accounting team who understands your business.
Working with out-of-house accountants is a great way to get all the value of that support before you’re ready for a dedicated, full-time staff. The right outside accounting partner is as invested in your business’ success as if they were in your C-suite, so anyone you bring on board to help your business should match that energy.
Finding coverage for employees when they need to take sick time, vacation time, or any other type of leave can be a stressful challenge. You may face paying both their salary in addition to wages for another interim hire or temp, OR you’ve got to cover their responsibilities, which might spread the rest of your staff too thinly.
With out-of-house accounting support, you never have to worry about benefits coverage, PTO, or HR for your accounting team. That way, your monthly fees would be what you’d pay for continuous support without accommodating personal needs and scheduled time off.
Often, a CFO’s CV will include one to two other C-Suite–level roles. As strategic advisors, an out-of-house accountant will have worked with dozens of production companies in the same capacity.
The challenges of out-of-house accounting
However, there’s no such thing as a free lunch. While working with an out-of-house accounting firm is an excellent option, it’s not without its trade-offs.
While remote work is becoming more and more accepted, interacting with people face-to-face offers real value—especially in building relationships.
When working with out-of-house accounting support, you may rarely—or even never—see your accountant in person. And without frequent interaction, they may not fully understand your business needs or goals. This is especially true given the unique challenges of commercial accounting.
Reliable companies take the time to build solid relationships founded in trust. Virtual face time is critical to help stay in sync with your shifting needs. Regardless of whom you hire, ensure your financial support staff has a strong relationship based on trust with you and your production company.
Part of developing your relationship with accountants is finding a way for your systems and theirs to integrate well.
Find an out-of-house accounting team that puts your comfort first. Most accounting firms will suggest particular system and process changes to increase cost savings and efficiency; there is always room for clients to make the needed adjustments.
The most significant benefit of this intermediary step between a freelance accountant and a dedicated CFO is that you’d be hiring a whole company. Instead of hiring an executive, your production company would collaborate with another well-managed business providing round-the-clock holistic financial support.
In an ideal world, everyone would have the perfect in-house team they need to manage their money. However, we hope we’ve shown you how an out-of-house accounting firm can help get you a little bit closer to that ideal.
Curious about how Wrapbook can help you manage your accounting? Check out our accounting page and learn about our commercial accounting solutions. Or, if you’re really curious, sign up for a demo of our payroll solutions software and see what all the fuss is about.
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.