Administrative
Welcome to the Amazon MGM Studios Production Finance Manual. This manual is tailored to Amazon MGM Features, Scripted Series, and Unscripted Series that are produced in India. Any deviations and exceptions for international productions should be discussed with your Production Finance Executive.
The Line Producer (LP) (or Executive in Charge of Production), and Production Accountant are responsible for ensuring that all studio policies and procedures are followed.
If asked to make any questionable payments or to deviate from the policies established here, notify your Production Finance Executive immediately.
Filing Guidelines
The studio requires that Accounting keep copies (electronic and hard copies) of all physical files for up to 7 years or period required by applicable law, whichever is longer, from when the show or final episode has been launched. The guidelines below are intended to help you set up and maintain this electronic system.
Upon commencement of each project, the Production Accountant should request the access to digital filing (Box) and all studio forms and templates
All documents should be labeled in English in the following format:
SHOW NAME_SEASON NUMBER_EPISODE NUMBER_DOCUMENT NAME (Including Counter Party Name, if applicable) _DOCUMENT DATE_DRAFT or FINAL
Eg: Mirzapur_S1_Ep2_Car rental Hertz_1.03.24_FINAL
Box
Box is a cloud content management and file sharing service. Initial access will be provided to the Production Accountant and additional users can be added later. All scanned files must remain up-to-date on the site.
- Production Finance will set up a Box folder for you to upload all Government-related payments’ supporting documents.
- All files must live in Box. Any documents housed outside of Box should be duplicated and filed into Box.
- Digital Filing must happen “as you go”, not at the end of the show. Box files should remain current at all times.
Approvals
Please ensure the Head of Department, and Executive Producer / Line Producers, approve all payment transactions, including purchase orders, invoices, and petty cash memos (See page 12 - Petty Cash). The approval process must be reviewed and approved by the 3P auditors, before being set in place.
Donations
Do not make any kind of donation without prior studio approval. This includes in kind donations for location fees.
Gift Purchases
Physical Production Executive (or Post Production Executive) and Production Finance Executive approval is required prior to purchasing any gifts for cast or crew.
Production Finance Reporting
3rd Party (3P) Production Auditors
Amazon Studios will assign a certified audit company to your project, and their designated auditors will guide you through the Audit Process & Guidelines. The Production Company must adhere to these guidelines meticulously. Upon request, you must disclose all project-related expenses, including advance payments, estimates/invoices, bank transfer information, and respective payment modes, to the audit company. Final funding will only be released after resolving all outstanding audit findings and completing the audit process. To facilitate final closure, ensure that you provide the auditors with all required documents, such as general ledger, petty cash logs, government-related payment logs, bank statements, invoices, supporting documents, bills, and any other relevant records.
Cost Report
The designated 3P auditors will generate a weekly cost report and share it with Amazon via email – weekly during pre-production and production phases, and monthly during post-production. Any expenses incurred by the Production Company before the 3P auditors join the project must be shared directly with the 3P auditors by the producer. Cost reporting must commence as soon as Amazon funding to the Production Company starts. The designated Amazon MGM Studios’ Cost Reporting Template must be used for these Cost Reports.
Items to include with each submission:
• Cost Report
• Log of all Government-related payments (accompanied with official government receipts)
• Bank Reconciliation
• Bank Statement
• General Ledger
• Details of any Advances paid to line producer (including details of appending invoices)
• Petty Cash Log
The PSC must collaborate with the third-party auditors to review all cost reports before they are submitted to Amazon. After a cost report is finalized and approved by the Amazon Production Finance Executive (APFE).
General Ledger (GL) Submission
All expenses are subject to regular audits. A general ledger entry has to be descriptive and contain all relevant information (nature of goods/ service, vendor information, invoice numbers etc.) to the satisfaction of the 3P Auditors. Each GL entry must be tagged to the right expense head based on the description and must have an invoice number. Any GL without an invoice number/ cash memo details, will not be reimbursed by Amazon. The General Ledger must be submitted to the 3P auditor with each cost report submission to Amazon.
Government-related Payments
All payments made to a Government Entity or Official must be recorded in a separate tracker. Whether payment is made in cash or by wire transfer – and whether directly paid by Prod Co or via third party sub-vendor – all such amounts must be captured in the separate tracker and be supported by an official receipts or ratified documents from the government agency (verified by the auditor). While we highly discourage the use of cash for this type of transaction, in the event of cash payments greater than or equal to INR 20,000 must be pre-approved in writing by your Amazon MGM Studios’ Production Executive and Finance Executive prior to payment release. All official government receipts which serve as back-up are to be scanned and uploaded to BOX.
Mode of Payment
Payment to vendors should be made primarily through bank transfers. In cases where bank transfers are not feasible, prepaid cards or UPI transactions can be utilized. The use of personal credit cards is strictly prohibited. If corporate credit cards need to be used, the Production Accountant must implement a system to clearly track and manage credit card expenditures. Additionally, ensure that the on-ground team receives adequate training to conduct UPI transactions seamlessly.
Overages/Savings
Any and all cost savings from amounts drawn down by the PSC shall accrue to the benefit of Amazon MGM Studios and any and all expenditures incurred by the PSC in excess of the production schedule and budget must be pre-approved in writing by a designated representative of Amazon MGM Studios, on an item-by-item basis in the cost report. The studio shall be under no obligation to advance or pay any overage unless and until such overage has been approved in writing by a duly authorized representative.
Any known savings or overages should be addressed immediately. The Production Accountant MUST have approval from both the Physical Production Executive and Production Finance Executive for ANY bottom-line cost report variances prior to closing the period and publishing the Cost Report.
Cross-Collateralization between Line Items
Cross-collateralization between Above-the-Line (ATL) and Post-Production line items is not permitted. If there is a need for cross-collateralization, pre-approval must be obtained. Any reallocation of expenses between line items that exceeds the threshold mentioned in the Production Services Agreement (PSA) will require written pre-approval from your Amazon Production Executive via email. Adhering to the approved line item budgets is crucial, and any deviations must be properly authorized to ensure compliance with Amazon's policies.
Cash Flow
A detailed cash flow must be submitted, at the very latest, 2 weeks after greenlight. Funding towards the project will only commence once the cashflow is locked. Furthermore, after Greenlight, no runway funding will take place until Amazon receives the signed Standard Terms & Conditions (STC) from the Prod Co. The Cashflow holdback will be as per the holdback percentage mentioned in the Production Service Agreement (PSA). The cash flow format will have the filing instructions and the payment milestones. Any exceptions to Prod Co Agreement will require Amazon written approval.
Please use the provided Cash Flow Templates below.
Scripted / Unscripted / Movies
This cash flow should include all expected expenditures so that the studio can approve weekly pre-production spending. It should tie to the gross production budget, but also include items that affect the cash needs of the production (e.g., deposits, recoverable taxes).
Unless otherwise agreed, the standard mandatory hold-backs are; 2.5% holdback upon delivery and approval of all master materials. The second is a 5% holdback that will be released when all departmental deliverables, payments, final cost report, and supporting documentation have been received and approved by Amazon.
An updated cash flow based on the locked budget should be provided to your Production Finance Executive within 1 week of locking the budget, and at least 3 weeks before day one of principal photography.
If anything occurs during production which causes substantial changes in the cash flow projection (e.g., delays in the start of photography, an increased shooting schedule, substantial budget overruns), a revised cash flow projection will become necessary.
Chart of Accounts/Coding
The Chart of Accounts may not be changed or modified without prior approval from your Production Finance Executive. Please reach out to Production Finance for the current Chart of Accounts. Please use the appropriate COA for your production.
PSC must use the provided Amazon MGM Studios’ production budget template. The Production Accountant should review the budget in pre-production to be sure that all accounts utilized conform the Amazon chart of accounts.
Budgeting
A budget template will be provided by the Amazon Production Executive. Official budget submissions should come to Amazon MGM studios from the Line Producer (LP) (or Executive in Charge of Production or Production Accountant) and always include the Production Accountant, Line Producer, Production Finance Executive, and Physical Production Executive in the distro. Regular updates should be shared throughout pre-production. The locked budget should be submitted at least one month prior to the commencement of principal photography.
Currency Exchange Rates
If other currencies other than INR are used for the production, please ask your Production Finance Executive for the exchange rates to use in the budget. Do not assume any exchange rates otherwise.
Tax Incentives
If your project will be applying for tax or film incentives, please contact Physical Production Executive and Production Finance Executive to discuss how to budget and report it.
Banking Procedures
Bank Accounts
The PSC must set up a production bank account for the sole purpose of the production. The account that the PSC opens for Development funds, may be continued for Production also.
Amazon Prime & MGM Studios Marketing and PR Costs
Costs of other projects and any marketing related costs may not be co-mingled or be paid through the production bank account, except for cost for the Stills Photographer. Please treat all other Marketing and Public Relations (PR) costs as separate from the production budget. This includes costs related to on-site stills photography. Payments for Marketing and PR are not to be paid from the project’s dedicated bank account. All Marketing and PR expenses are subject to Marketing or PR’s prior approval. Please set up a meeting with your Amazon Marketing and PR contact regarding payment details for these activities. If at any point there is doubt as to which account to put money into, check with your Amazon Production Finance Executive.
Foreign Currency
Unless otherwise agreed, the PSC must set up a different bank account for each currency. Each bank account must be registered in Payee Central for the purpose of production funding. Please check with your Production Finance Executive for the availability of currencies as not every currency is pre-approved for funding. If the production requires funding in a currency not immediately available, the studio may need to obtain special permission.
Funding
Once the legal agreements are in place, the PSC must be on-boarded to Amazon’s payment system to initiate funding for both development and production costs. Before Development funding begins, the Prod Co must open a dedicated bank account for each project for the funding to be paid to. When the project is greenlit, the PSC will continue receiving production funding via the same dedicated bank account.
Funding requests should always be based on current production needs. The Production Accountant must continually monitor all bank accounts to make sure they are not over or under funded.
Invoices can only be raised after Amazon has provided the Purchase Order (PO) number. It typically takes 10 to 15 business days for funds to be transferred from the date of receiving an approved invoice. Please note that funding and transactions occurring during month-end closures may require additional processing time.
Related Party Transactions
No payments are allowed to move from the dedicated project account to the Prod Co Bank Account, other than the Production Service Fee, expenses (called out in the STC) and GST return filing payment.
Any transactions done with any related party should be disclosed and pre-approved in writing. These transactions should be at an arm- length pricing and approved by the auditors.
Crew Equipment Rentals/Related Party Rentals
It is studio policy that Production should not rent equipment directly from crew. If an exception is made, PSC must get prior approval from Amazon Production Executive, and Production Finance Executive prior to any payments being processed.
Crew renting equipment to production will not automatically receive certificates of insurance (COI’s). Requests for COI’s must be approved by Legal and the Physical Production Executive.
When Production is renting a vehicle from an employee (not including car allowances), pre-approval must be obtained from Legal. If approved, the Related Party Rental Form will be required along with any other applicable forms as required by Legal.
Equipment rental rates must be negotiated according to policy for all vendor negotiations. The daily rental rate should not exceed 1% of the inventory value (i.e., the rental rate for an inventory valued at INR 800,000 should not exceed INR 8,000/day.) In no case should the total rental paid per year exceed 50% of the inventory value. Do not negotiate an equipment package rental rate without the inventory in hand.
Personal tools of trade kits with inventory values exceeding INR 800,000, are treated as equipment rentals. Equipment rentals are insured by production for the depreciated value of the equipment. It is recommended that the employee keep clear records of all equipment purchases contributing to their equipment package.
Conflict of Interest
The Conflict of Interest Form must be completed by all crew members. If a crew member has a conflict of interest, it must be noted on the form and approved by the Physical Production Executive.
Examples of conflicts of interest are:
• Crew members who engage the services of or purchase/rent goods from a relative.
• Crew members who own or are part owners of a company that provides services/goods/rentals to the production.
• Crew members whose relative(s) are also working on the production.
Accounts Payable
Vendor Invoices
Vendor Invoices
Everything must be billed to the Production Company and all invoices must have the following:
• Invoice number
• Invoice date
• Project name and season number
• Itemized list of items purchased or rented
• Detail of services provided, if applicable
• GST must be clearly separated out
• GST Number (if applicable)
• Correct Company name being billed
• Full name and address of Company issuing invoice
ALL Expenses have to be supported with a valid invoice or an approved Cash Memo or else it will not be reimbursed. Kindly ensure that the on-ground staff is trained to scan/photograph invoices such that there are no instances of missing invoices at the time of verification by 3P auditors.
Invoice and Cash Memo Booklet (PSC to print)
As soon as the show is put into development, the production company must print an invoice book (with unique serial numbers printed) and a cash memo book (refer to the prod fin kick off doc for links to both templates). The format of both these booklets must be followed.
All invoices should be approved by the Head of Department, and Executive Producer / Line Producers.
Contracts
Production (or the appropriate department head) must obtain contracts for all vendors being engaged to provide services or rentals.
Expendables
The studio has a strict policy not to buy expendables from employees. There are no exceptions to this policy.
Some examples of expendables (but not limited to):
1. Camera film stock/digital media cards
2. Lighting gels, diffusion materials
3. Grip tape, cable ties, sandbags
4. Makeup and hair products
5. Production supplies (pens, markers, tapes, clipboards, etc.)
6. Batteries
7. Walkie-talkie batteries/chargers
8. Gaffer's grip supplies (nails, screws, rope, etc.)
9. Craft services supplies (plates, cups, utensils)
10. Set dressing supplies (plants, decor items, paint)
Loss & Damage (L&D)
Any loss or damage when filming must also be documented on the applicable days in the Production Report. All L&D must be coded to the applicable department’s L&D line. Please check with your Amazon production executive if you’re unsure of which COA to use.
Catering Counts
The 3P auditors will cross-check the daily meal counts on the caterer's invoice against the corresponding production report. If a discrepancy is found between the catering invoice and the reported meal count, the supervisor, line producer, or unit production manager will be notified to provide a revised invoice to the auditors.
Deposits
Accounting should ensure all deposits are contractually written before issuing. Any down payments as “deposits” should be charged to cost accounts. All deposits must be collected before final payments are released wherever possible.
Trial Balance – Receivables
All receivables must be invoiced on a timely basis. Accounting should not wait until the end of Principal Photography to collect receivables.
Purchasing Cards (Happay Cards)
It is the studio’s strong preference for productions to be cashless. PCards should be issued to crew members instead of petty cash whenever possible. Amazon MGM Studios discourages the use of personal credit cards and debit cards.
Amazon MGM Studios do require a threshold per top up for each Happay card. Please discuss with your Amazon Production exec, Production Finance exec and Amazon appointed 3P auditor on the maximum threshold per top up for the Happay Card. Contact your Production Finance exec should any requests be made outside of the pre-established limits. All exceptions must be pre-approved by the Production Finance Executive.
PCards are the responsibility of the crew member and are not transferable from one person to another. PCards ordered for employees of a loan-out should be ordered in the name of the employee, not the loan-out company.
Petty Cash
Cash withdrawals are not permitted directly from the project account. Petty cash expenses will only be permitted via a reimbursement model (bank transfer of money to a crew member, for which accounts and bills will be submitted), when all other means of payment have been exhausted. All petty cash expenses must be supported by a cash memo and be recorded in a separate tracker with the following details: date, amount, recipient, description, approver & reason for using cash. Any petty cash expense above INR 1.25 Lac will need a written pre-approval from an Amazon Production executive. If the preapproval is not taken, that expense will not be reimbursed. The Custodian’s petty cash fund should be reconciled to the general ledger on a weekly basis.
Petty Cash CANNOT be used for any of the following:
• Cigarettes (unless it is a prop)
• Alcoholic drinks
• the rental fee of equipment, products and vehicle owned by crew
• Crew/staff labor – including per diem (please discuss with Amazon POC if a foreign crew member is in the team)
Advance Paid to Vendors/Line Producers
Any vendor advances should be released only after doing a complete background check on the vendor/line producer, and after verifying the expense list (no government related payments can be advanced), and payment schedule submitted by them. Any contracted Line Producer must open a separate bank account for a given project. They should be trained on Amazon mandates, and spending and compliance policies. In case of advances above INR 20 lakhs, a written pre-approval should be taken from your Amazon MGM Studios’ Production Finance Executive. For all advances, proper invoices/ cash memos need to be submitted to the auditors. Prod Co must retain a % of the line producer fee payment, to ensure that any adjustment for missing invoices, if needed can be made, as Amazon will not reimburse any advance that is not supported with an invoice.
Prohibited Expenses
Cigarettes, cigars, or alcoholic beverages expenses for any personal use are not permitted. In the event these are needed by the script as a prop, it will have to be verified and accounted for by the auditors.
Assets
The Accounting team is responsible for keeping an accurate and current record of all:
• Items with a value of INR 40,000 (including tax) or higher (tag with “A” in Free Field 1).
• Hero items, regardless of price (tag with “H” in Free Field 1).
• Drives or devices that hold proprietary content, regardless of price (tag with “C” in Free Field 1).
• Transferable Software (such as Showbiz, Movie Magic), regardless of price (tag with “S” in Free Field 1).
• Electronic devices with a value of INR 20,000 or higher (tag with “E” in Free Field 1).
• Other items of value at the Production Accountant’s discretion (tag with “O” in Free Field 1).
Each asset should be entered as a separate GL line item. If multiples of the same item are bought, they can be entered as one-line item, but the quantity must be stated. If an asset (such as wardrobe) is returned, Accounting should tag the returned asset in Free Field 1 with “R” and change the original asset purchase tag to “R”. If a smaller quantity of assets is returned than purchased, the original purchase line should be split out using Posted Items Editor (or your accounting software’s equivalent module).
Department Heads are responsible for all assets charged to their departments. One week prior to the end of filming, Accounting must export all tagged assets to the Asset Log form. Once the assets logged into the form, Accounting should send the template to Production. Production will then sort the assets by department using the tabs provided and distribute the applicable sections to each department.
Studio Physical Production and the Global Physical Production Asset Executive will coordinate with the Production Office to obtain all completed department asset reports. The final Asset Log should be copied to the accounting files. If a department has no assets, please make note.
The absence of any items from the exported list does not preclude accounting for them. There is a section on each department’s tab in the Asset Log that allows for a list of additional items that will be retained that are not tagged as assets in the software.
Titled Assets
All vehicle, boat, or other titled purchases must be pre-approved by the Physical Production Executive, with copy to the Production Finance Executive. Production must notify Risk Management and the insurance broker prior to making payment. All titled assets must be registered in the production entity’s name, and all sales and transfer taxes must be paid. The Production Office should make a copy of the title and registration, and Accounting should file it in the applicable A/P file. Production will send the original title, registration, and keys to studio Physical Production at wrap. Storage options, transport, and sales of purchased vehicles will be coordinated by Production with the approval of the Physical Production Executive.
Asset Sales
Assets are not to be sold or given away without the prior approval of the Physical Production Executive and Global Physical Production Asset Executive.
Sustainability
Sustainability tracking is the responsibility of the Production Office. The studio’s Sustainability Department will reach out to Production during prep to coordinate the requirements for tracking. Free field tagging is generally not necessary, as the applicable data can be found via account code or vendor. The Production Coordinator and/or Travel Coordinator should have much of the required documentation, but Accounting may be required to pull backup upon request. Examples include electricity vendor bills, and hotel/travel bills.
Tax Incentives
The following applies to PSC’s: The PSC should work with the studio’s Tax Incentive department, Physical Production Executive, and Production Finance Executive to take all steps necessary to obtain any and all tax credits, incentives, subsidies, rebates, or other financial relief made available in all applicable jurisdictions. The PSC will work with the studio to determine whether the PSC or the studio is the legal applicant for each tax incentive. All preliminary/initial and final applications must be sent to the Production Finance Executive and Tax Incentive department.
The studio utilizes several different advisors and service providers to prepare and submit Production Incentive applications. Projects eligible for any Production Incentive should properly budget for any preparation, auditing, and filing fees.
The PSC must ensure that it meets all the relevant requirements of, and promptly files all necessary documentation for the tax incentives, including compliance with all legal and regulatory requirements (including the required payments of taxes, social charges, and other payments to government agencies). Throughout this process the studio’s Tax Incentive department will oversee the stages of the tax incentive and serve as a bridge between PSC, Production Finance Executive, and Physical Production Executive.
Insurance Claims
As soon as you become aware of an incident that could give rise to an insurance claim, it is essential that the Physical Production Executive, Production Finance Executive, Risk Management, broker(s), and the insurance company are notified.
Any cost pertaining to the insurance claim should be tagged in the general ledger. All costs should remain in their original cost accounts with normal tax credit tagging. Accounting should tag the insurance field (i.e., I1, I2) for all claimable costs. This way, a ledger can be run using the insurance FF tag to isolate the claim costs for both the insurance company and the tax credit auditor. Cost report variances should be reflected in each of the costs accounts with any insurance claim spend. These insurance variances should then be offset by a credit in the ETC column in account 6771-0000 (MGM COA). The ETC credit in 6771-0000 (Amazon COA) should tie to the total amount flagged in the GL to date for the claim. Before issuing your first cost report with an insurance ETC credit, reach out to your Production Finance Executive to discuss adding a discount amount for the claim.
The deductible for the claim should be coded to account 6771-0001 (Amazon COA).
The Production Accountant is responsible for maintaining detailed supporting documentation (e.g., checks/invoices, timecards/paystubs, envelopes/receipts) reflecting all relevant costs for the insurance claim. This documentation should include copies of all payments tagged for insurance, which should be saved in a separate Box folder for each claim. The payments should also remain in their standard A/P, Payroll, or PCard file. (In other words, there will be 2 sets of backups for all insurance claim items – one in the standard file, and one in the relevant insurance claim file.)
The Production Accountant should also request a detailed claim narrative from the Production department for all claim elements. This narrative should explain the events that led to the insurance claim and the estimated cost impact to production. The Production Accountant should keep this memo as well as relevant documentation including schedules, calendars, call sheets, production reports, and medical letters in the Box folder for each claim.
Please make sure all claim documents have been submitted and confirmed receipt by Amazon’s appointed insurance broker prior to Accounting wrap. As soon as all insurance claim costs have been paid and/or assessed and all documentation has been prepared for the claim, please notify the studio so that the claim details and all relevant backup can be submitted to the claim’s adjuster/insurer. Speak to your Production Finance Executive should you require additional assistance in this process.
Production Audits
Amazon MGM Studios shall be given access to production accounts, records, and other information to allow the studio to conduct audit(s) related to the project’s expenditures. The Production Accounting team will give all reasonable assistance to Amazon MGM Studios and/or its representatives in this regard, including but not limited to, inquiries, walkthroughs of processes, gathering and providing supporting documentation, and remediating any exceptions identified during the audit.
We will confirm which certified audit company will reach out to you. The auditors and Production POC will walk you through the Audit Process & Guidelines, and the Prod Co must adhere to those guidelines. Please disclose all project-related expenses (e.g. advance payments, estimates/invoices, bank transfer information), and the respective payment mode, to the audit company upon their asking. The final funding will only be paid after the audit has been completed. Please ensure you provide all the documents required by them for final closure (Example - Bank statement, Invoices, Supporting’s, Bills, etc.)
Anti-Bribery and Corruption Requirements
Amazon does not tolerate corruption and it expects the same commitment for third parties that work on its behalf. All PSCs must adhere to the anti-bribery and corruption requirements as detailed in their PSA, Standard Terms & Conditions, and any other applicable agreements with Amazon. Specifically, you must conduct business legally, ethically, and with the highest levels of integrity, and not engage in bribery of any kind, including, without limitation, kickbacks, unofficial payments, facilitation payments, grease payments or courtesy payments, whether directly, or indirectly, through a third party.
Wrap
Development, Pre-Production, and Production Cost Closure: All costs related to development, pre-production, and production must be closed with the auditors within 30 days of the last shoot day.
Wrap Memo and Checklist: Upload a copy to the designated BOX folder before show wrap. Report any incomplete or outstanding items to Amazon MGM Studios Production and Finance Executives. Notify Amazon MGM Studios Finance Executive if there is a refund inbound.
Final Deliverables and Project Closure: Once final deliverables are approved by Amazon, close out all remaining petty cash floats, deposits, accounts receivable. Share zero-balance bank statement and final cost report with auditors within 2 months of final delivery. Any delays beyond 2 months will result in production house bearing closing costs (auditor fees, storage, etc.). Unreconciled audit findings (missing invoices, government receipts, pre-approvals) will be adjusted from the last payment tranche.