Read below to learn more on how to set-up your Film/Video Project in Quickbooks Desktop (PC or Mac)
If you would like to have me set it up for you, skip to the very bottom of this page for more information.
CHART OF ACCOUNTS:
If you will be dedicating the QuickBooks company file you are setting-up to one film project, the simplest way to do it is to set-up all of your budget lines within the QuickBooks Chart of Accounts as Expense type accounts.
You can accomplish most of this set-up process by first organizing your budget in Excel with columns for account #, account name, account type – from there, your Chart of Accounts may be mapped and imported to QuickBooks directly from Excel. (If there are any other expense accounts that already exist within the QuickBooks file you plan to use, delete them. Mark Opening Balance Equity and any other unnecessary accounts which QuickBooks will not allow you to delete “inactive”.)
If your budget categories are not numbered, before you start to set-up the QuickBooks chart of accounts, you want to add a numbering scheme (3 or 4 digit digits depending on how many line items in your budget) to hold the QuickBooks account structure in place so it appears in the same order on reports. (On the desktop QuickBooks version, users may set the preference to use account numbers. In QuickBooks online, you need to set the preference to “use account numbers” in the preferences screen, and also click the checkbox in the upper left corner of chart of accounts screen called “use account numbers” to make the numbers visible.)
(If you do not wish to assign or use any account numbers, be aware your chart of accounts and reports will be alphabetically sorted on reports if you use Quickbooks online and if you use QuickBooks desktop mac or pc, from the chart of accounts screen you may drag the accounts/detail lines into the order you want them to appear in on reports.)
After setting up all the detail and summary lines of your budget as the QuickBooks Chart of Accounts, the last step is to set-up your budget’s “detail lines” as QuickBooks sub-accounts under each category header. This can be accomplished in QuickBooks Desktop versions and QuickBooks Online as well, by editing the accounts one by one to click the box that says ‘this is a sub-account of:” and selecting or keying-in the heading account which the detail line should be totalling up with. Or, in desktop versions only you may drag your accounts underneath and slightly to the right of their header to make the sub-accounts appear ‘indented’ under the category headers.
Since the point is to track your project costs and not net income or profit, the income/sales account for invoicing or recording funding is typically set-up as a balance sheet account, “production funding”. (Production funding may also be considered an income account if you need to track net income as well as production costs; the account type may be switched back-forth if/as needed on a report-by report basis.) If several parties are contributing then you may wish to set-up sub accounts to track cash contributions, loans, ownership & equity
Now your chart of accounts should be complete, you may wish to read on about setting up the QuickBooks “Item list” (in desktop), in QuickBooks Online this is called the “Products & Services” list.
ITEM LIST (QuickBooks Desktop) or PRODUCTS & SERVICES LIST (QuickBooks Online)
Just like there are a few ways you can use QuickBooks as a production accounting software, there a a few options for budgeting: you can use “Estimates” to budget/track costs for multiple jobs or you can use the QuickBooks “Budgets” tool. Estimates & P.O.’s work in conjunction with the Item list and the budget tool works with the Chart of Accounts.
If you need to be able to create P.O.’s in QuickBooks then you will also want to set-up your budget categories within the QuickBooks “Item list”. Setting up your budget categories as QuickBooks “Service” Items takes extra effort but enables you to issue PO’s. Setting up your lines items as QuickBooks Items also will allow you to use the “Estimate” form to track your budgeted to actual costs within QuickBooks, instead of the QuickBooks Budgeting tool.
OTHER RECOMMENDATIONS when setting-up QuickBooks for your Project:
If you opened a separate bank account you can hook it up with QuickBooks online banking to save yourself a lot of time. I also highly recommend that you purchase QuickBooks check stock so you’ll be able to print checks directly from within QuickBooks, and further eliminate data entry requirements/reduce the chance of error when manually entering checks and cash disbursements, and also speed up the reconciliation process.
Printing checks from QuickBooks as well as using Online Banking features will help you to reconcile your bank/credit card accounts in QuickBooks — Reconciling is the ONLY way to tell you have entered everything correctly & also that all the data is in QuickBooks for the period ended on the bank or cc statement that you are reconciling to.
This article has mostly focused on how to set-up QuickBooks to track one film project’s costs, in cases where typically the film is considered an asset of the person(s) &/or entities who own the completed film, or a partnership or LLC is set-up to produce one film only.
If you wish to track a production company’s overall income & expenses for the whole year for taxes, and in certain other situations sometimes it’s preferable to only set-up the detailed budget within the QuickBooks item list and then track all expenses within one Cost of Goods type of account, instead of setting up the Chart as the budget as well as the Item list like I have described above.
If you do not own the completed product, then you are creating a “work for hire” as opposed to owning the rights to the completed project. If you are creating a work for hire, then the costs need to be considered as a Direct Cost (COGS type account). Whether you need to track one project or you create/contribute to multiple projects as “works for hire”, you can still track detailed budgets by utilizing the QuickBooks Item list
WANT HELP (or NEED TO EXPEDITE) the QuickBooks Chart of Accounts &/or Item List SET-UP for YOUR PROJECT?
Although I have gone into painstaking detail above to explain exactly how I do this so you may read my instructions and DIY, I do offer a service to help you set-up your budget within either the Chart of Accounts &/or the Item list.
Should you want more assistance using Quickbooks after your project has been set-up, I offer tutoring/training either in-person (for L.A. area only) or remotely (worldwide). (I also offer full-service outsourced production accounting, contact me for more information 🙂 )
The cost to set-up your project in Quickbooks is based on the quantity of header accounts &/or detailed lines within your budget.
I need to see the budget in Excel format to quote you an exact price to set-up any particular project.
If you’re interested in this service, please contact me here, send a short note to let me know you are interested in having your chart or item list converted into a QuickBooks file, and I will reply via email so you may attach your budget. After having a chance to look it over, I will return a quote to set-up your project and a credit card payment link if you wish for me to proceed.
It can take me from 24 up to 72 hours (for more complex budgets) to get your project completely set-up in QuickBooks. When completed, I can either send you the back-up of the whole QuickBooks file which you may restore and start using right away, or I can send the chart of accounts and/or item list as an import file, which you may import into any existing QuickBooks file to start using it immediately. Or, I will upload the file to QuickBooks Online for you to try to Free 30-Day trial.