Film Accounting Glossary
Operating account
What is the operating account?
Also called production account, or production bank account.
The operating account is the dedicated bank account through which a production's day-to-day money moves, kept separate from any other project or from the parent company's general funds.
Segregation is a basic control and usually a financing condition: it makes the picture's cash position provable and stops one production's shortfall from being covered by another's funds. Productions typically also run separate payroll and petty cash accounts feeding from it.
Example
One picture, one dedicated account, with separate payroll and petty cash accounts feeding from it. Pooling two productions in one account makes each picture's cash position unprovable and is usually a breach of the financing agreement.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Opened for the production entity at closing, with the signatory scheme and reconciliation duties attached to it.
Common mistake
Running two productions through one account. Each picture's cash position becomes unprovable, and it is usually a breach of the financing agreement as well.
Related questions
- Does each production need its own bank account?
- Yes, in practice. Segregation is a basic control and normally a financing condition, so one picture's shortfall cannot be covered by another's funds.
- What accounts does a production usually run?
- An operating account, with separate payroll and petty cash accounts funded from it, often as zero-balance accounts so central cash stays controlled.