How a Film Production Company does it’s accounting & taxes depends on a couple factors:
- Is the project(s) produced as a Work for Hire or an Investment? This dictates how you set-up the QuickBooks Online Chart of Accounts.
- When you or your company get paid to produce a project where you don’t retain any ownership interest, the production costs are treated as Cost of Goods Sold and deducted from income on the tax return.
- But if you produce a film with your own or investors’ funds, with the intent of future income generation via distribution or sale, the production costs are treated as an investment (asset) on the books of the entity that owns the project. These production costs are then amortized when the project generates revenue.
- Sometimes a separate entity &/or set of books is used to track film production costs
Failure to consider your business structure before setting up QuickBooks or other accounting software for your film or creative project can lead to significant time wastage and accounting errors.
With my 15+ years expertise in QuickBooks Online and a proven track record of managing hundreds of projects, I can guide you through a seamless setup.
If you’re currently setting up QuickBooks for your film, video, or creative venture, reach out for a complimentary consultation.