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Budgeting    It’s the Actuals that’ll Kill Ya

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-By Joel Stoner, AlterMedia CEO

The world of post production is an incredibly diverse ecosystem that ranges from the one-person, boutique shops who pump out innovative work, to multi-million dollar corporate shops with hundreds of artists and thousands of projects. But there is one thing that remains consistent across the expanse: budgeting! No matter how big or small your shop is, the art of budgeting is perhaps the most critical to long-term survival – no matter how great your work is.

In talking with production professionals around the world for the past ~20 years, I’ve learned that almost everyone has a different way of creating budgets. Most of them depend on some form of an Excel spreadsheet – either homemade templates, or templates sponsored by industry organizations in an effort to standardize the language and structure. There are also some specialized budgeting software products available. From my perspective though, all of these methods are lacking in one important area: Reality! In this fast paced world, once the project is done, it’s all too common to just move on to the next one without really doing a review of what happened financially, and too many have paid the price.

The point of any budget, of course, is to determine how much the end result will cost, and how much you’ll make. With creative workflows like Production and Post, you might as well call a psychic, because it almost never works out as we assume it will. Part of the reason (aside from fate) being that many of the existing budgeting solutions don’t have a very good way of turning a single generic budget item like “Editing” into real tangible items on a resource-based calendar, like Eddie Editor Monday from 10:15 -1:15, 2:20-6:45, and Tuesday from 9:30 to 12:45, and on and on, multiplied by all the seemingly infinite steps it takes to finish a production. Well, you could do that on a spreadsheet, but it’d be a big messy challenge to check back to get a global statistical report for any particular resource over a specified time period across many projects: how many hours were actually worked, how much was paid, how much you’re charging per resource or service, the profit / loss, per project, per month, quarter, etc, and most importantly, how did you do on that dang Budget versus Actual.

Since there’s no easy way to do that on a line-by-line level, people don’t, and that also means that there’s no way to learn how to make more accurate budgets by learning where you went wrong. People keep screwing it up (since they’re essentially forced to), but there’s never any lesson at the end, other than “oops, guess we’ll just pay the difference”.

What if there was a better way? There is!

Studio Suite Xi: Budget Different.
Studio Suite Xi from AlterMedia takes a completely different approach. The original design focus of Studio Suite was NOT budgeting. The initial focus was on scheduling and tracking expenses and charges (and thus, the also-kinda-important profit & loss). Oddly, that’s given us a better platform to manage the “holy grail” of Budget versus Actual, and Charges versus Expenses, because we’ve focused on the endless details of managing what actually happens on a production (in relation to real calendar schedules, real costs, real expenses, and real overtime). With that already in place, as well as our existing hierarchical structures to be able to expand & collapse line items and their related child (or sub) items, all of the infrastructure we need is present. From a software development side, we just duplicated that ‘actual’ structure over to the ‘budget’ view of a Project – with all of its built-in functionality intact.

From there, you can either build your own template, use one of your existing (custom Studio Suite) templates, or use AICP or AICE budget items already in Studio Suite to build out your budget, along with associated Rates that you can predefine with both charges and costs for each (so you can track Margins or Markups). You can be as vague (“Editing: 32 hours”) or precise (“Eddie Editor 9am-5pm on April 15, 16, 17, 18,”) as you need. Once you have your budget finished, you can print, email, or export an excel file to send to your client. After successfully negotiating numbers with your client, you click 1 button to send everything to the Actual side of the Project, and “reality” begins.

Once it’s an Actual, any scheduled physical resources or services and tasks appear in your Calendar, along with the Project itself, for the timespan of the Project. Best of all, any changes you make from the Calendar will be reflected back into the Actual, automatically generating accurate data in the Difference view (ie, compared to the Budget), so you will always see an automatic, up-to-the-minute status of how you’re doing compared the Budget. It’s helpful to think of it in this 2 dimensional grid, with your cash flow flowing top left to bottom right:

B to A image

But that’s not all there is…

Let’s say you do create a generic item in your budget called “Editing: 32 hours”, and you need to track exactly how and when those 32 (or maybe in reality 39.5) hours are being spent (or over-spent). Our friend Eddie Editor can log into Studio Suite, either directly (for full access), or thru the QuickLog module from a browser to log hours into the project (without seeing the rest of the items or pricing info). He can also simply go to the Calendar in Studio Suite and click on existing scheduled instances of himself to update times, or drag out any new hours to add them to the project. Either way, once they’re edited or added, the person in charge of the budget can assign those hours as child items (or sub items) to the generic “Editing” item or budget code as appropriate. We can then collapse the Actual item “Editing” (and all Eddie’s sub-events), revealing the difference between the single Budget item and the collapsed, summed Actual items, at a line item level, at a project level, a resource level, a facility level, and most importantly, a profit/loss level.

Of course, the rest of the items – studio time, labor, equipment rentals, services, etc. are handled the same way. Over time, over many projects, we start to learn where we’re underbidding or overbidding, and our budgets get closer and closer to… reality. Best yet, we have real data to look at in the rear view mirror at the end of the year, to find out what we did right, and what we did wrong, so we can better budget our future realities!

The team here at AlterMedia have been doing this for a long time. We’ve looked at the problem from many angles and dimensions. And since all of us here have at one point in time immersed ourselves in the crazy world of post production, we like to think that we’ve developed something pretty valuable. But don’t just take our word for it, check out our free trial and see for yourself. And share with us your success stories.

Joel Stoner is the creator of Studio Suite, the studio & production management software, and the founder/CEO of AlterMedia, Inc. a company that focuses on the unique business management and workflow needs of media production facilities.

For more information or a free 30 day trial, visit www.studiosuite.com