EU/UK Production Finance Kickoff

Amazon MGM Studios Chart of Accounts (COA) utilizes a four-digit structure. The code is comprised of a two-digit major and a two-digit minor account (XX-XX). Production Company (Prod Co) should prepare budgets and cost reports in accordance with the COA and not change the COA serial numbers which are predetermined and fixed. Amazon MGM Studios Production Finance Executive (PFE) will share the list of COA with descriptions as guidance, please follow the mapping of expenses according to the list provided.

Example: 

Major code:  89-00 – MUSIC

Minor code: 89-01 - MUSIC COMPOSER

Greenlight budgets, revised budgets and locked budgets created before the main shoot should be shared with Amazon MGM Studios Production Executive (PE) and PFE. Each budget should have a version number in chronological order and any changes from the previous version must be clearly highlighted.

A detailed cash flow must be submitted to your PE and PFE, at the very latest, two weeks after receiving the budget. Funding towards the project will only commence once the cashflow is locked. If any changes occur to the submitted cash flow or budget, a revised cash flow must be submitted to PE and PFE for approval as soon as possible. Furthermore, after Greenlight, no runway funding will take place until Amazon receives the signed Standard Terms & Conditions (STC) from the ProdCo. The Cashflow holdback will be as per the Production Service Agreement (PSA). The cash flow format will have the filing instructions and the payment milestones.

Once the legal agreements are finalized, the ProdCo must be onboarded to Amazon Payee Central to initiate funding for both development and production costs. Please refer to the PayeeCentral Initial Setup Guide. Upon greenlighting the project, the ProdCo must add a designated bank account in Payee Central to receive production funding. Once the ProdCo onboarding is complete, a funding plan needs to be agreed upon with PE and PFE, including but not limited to payment schedule, direct payments from Amazon (e.g. Talent, Showrunners, EP), and if applicable per PSA, holdback rights.

Any revisions or updates to the production schedule should be shared with your PE and PFE.

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 in any stage of the production. 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.

Each show must have a dedicated bank account for Production Funding per currency. These accounts should not be co-mingled with other Amazon or non-Amazon projects and non-production-related activities. For productions funded in more than one currency, transferring funds between different bank accounts is not allowed unless specifically requested to and approved by PFE.

Please ensure the Head of Department, Production Accountant, and Line Producer/Executive Producer approve all payment transactions, including purchase orders, invoices, and petty cash requests/envelopes. The actual approval process must be approved by PFE & PE prior to implementation.

When two or more currencies are needed, the foreign exchange rate of each currency will be fixed at green light. Please ask your PFE for the exchange rates to use in throughout the production.

If your project will be applying for tax or film incentives, please contact PE and PFE to discuss how you should proceed. In general, the ProdCo should take all necessary steps to maximize reimbursement of local tax, e.g. VAT. Likewise, if the decision is made to apply for film incentives, please begin the process as early as possible.

Please ensure you enforce sufficient measures to safeguard all confidential and sensitive information. (e.g. salary information). All files must be kept in a locked file cabinet/office, and all sensitive computer files must be password protected. All reports are to be uploaded to Box (Amazon’s cloud server).

Any reallocation of budget between line items over 3% of the total budget must have a written pre-approved from your PE, and your PFE must be informed.

Three competitive bids are required for purchases of a single item over USD 50k (EUR 50k / GBP 50k) and for rentals/packages that will exceed USD 50k (EUR 50k / GBP 50k)   over the run of the show. A Competitive Bid Form must be completed and approved by Dept. Head, LP/UPM, Production Accountant, PE, and PFE in each instance. If ProdCo cannot get three bids, please note the reason in a competitive bids waiver and obtain approvals from PE & PFE.

The Production Accountant is responsible for completing each Cost Report using the cost report template provided by your PFE. The Production Accountant and the LP/UPM should meet to review the Cost Report and to ensure that all known variances are accurately reflected. Changes in any Amazon MGM Studios templates are NOT allowed.

Items to include with each submission:

1. Cost Report
2. Bank Statement / Bank Reconciliation
3. General Ledger / Trial Balance
4. Petty Cash / Cash Advance logs
5. Log of all Government-related payments (accompanied with official government receipts)

Submission Frequency: monthly, if requested by your Production Finance Executive the frequency could be bi-weekly during the Production phase.

There are some key details that Production Accountant should include on the Cost Report template top sheet and update monthly as necessary: Production Dates and Cost Report Notes and Variance commentary.

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 name, vendor tax ID, invoice numbers, invoice date etc.).  GL entries without supporting information will not be reimbursed by Amazon. Each GL entry must be coded based on the nature of the expense. GL should be generated and submitted to Amazon along with each Cost Report. GL coding must match the COA and Cost Report.

PFE will create and share a BOX folder with templates and other necessary documents. You will receive an invitation to join. Do not create your own Box folder. Once the Box folder is created, PSE may create additional sub-folders.

All reports should be labeled in English in the following format:

SHOW NAME_SEASON NUMBER _DOCUMENT NAME _DOCUMENT DATE_ (e.g. XYZ Show S1_Cost Report _MM.DD.YY, XYX Show S1_General Ledger_MM.DD.YY)

ProdCo should make every effort to make payments via bank transfer. If bank transfer is not possible, it must be paid via purchase card, prepaid card, or cash advance. Corporate credit card can be used only if pre-approval is obtained from APFE in writing.

Cash withdrawals directly from the bank account set up for the project are not permitted. Petty cash will only be permitted when all other means of payment have been exhausted. Prepaid card, advance, and reimbursement are all considered “Petty Cash”.

The Production Accountant should prepare a reconciliation for each petty cash grant on a monthly basis. The reconciliation should include the amount granted, details of each purchase made with the petty cash, and the remaining balance.

Petty cash expenses should also be recorded in the GL with details such as good/service provided, transaction date, vendor/recipient (Name or Tax ID), and payment amount.

Any cash payment, including paid via cash withdrawal from prepaid card, cash advance, reimbursement, greater than or equal to USD 1,500 (EUR 1,500 / GBP 1,500), must be pre-approved by your APFE. Expense will not be admitted/reimbursed without the pre-approval.

Written approval from your PFE must be obtained for any PCards/ Corporate Credit Card/Prepaid Card issued with a purchasing limit exceeding USD 10k (EUR 10k / GBP 10k).

Any and all payments made to a Government Entity or Official must also be recorded in a separate government related payment 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 which includes the vendor name, description of good/service provided, transaction date and amount paid. All government payments must be backed up by official receipts. The government payment tracker and related back-up support should be uploaded to BOX on a monthly basis (bi-weekly if requested by your PFE).

Any cash payment, including paid via cash withdrawal from prepaid card, cash advance, reimbursement, to a Government Entity should be approved by your APE and APFE in writing prior to payment release.  

Payments from the project account to the PSC’s Bank Account should be limited to production service fee explicitly listed in the PSA and VAT/GST return filing payments. 

Except for the fees explicitly listed in the PSA, any production cost will be paid to the ProdCo or related parties of the ProdCo should be disclosed in the locked budget as a related party expense. In addition, supporting document, such as direct vendor invoices, contracts, pay slip, and allocation methodology, should be provided for PFE’s review and approval before processing the payment. These transactions should be at an arm-length pricing.

Any non-payroll related purchases and invoice with an aggregate cost of USD 100k (EUR 100k / GBP 100k) or greater must be approved by your PE and PFE. A higher limit may be designated with formal written approval by PFE.

Gifts and any donations (e.g. charitable, in-kind, etc.) are not permitted without explicit PE and PFE’s approval in writing prior to payment.

An asset is any purchased item over $500USD (or regional equivalent) or consumer electronics over $250USD (or regional equivalent), or firearms (any type, including but not limited to: soft or hard rubber, airsoft, or firing weapon) at any price point.

Production Accountant is responsible for keeping an accurate and current record in GL for the assets below:

•          Items with a value of USD 500 (EUR 500 / GBP 500) (including tax) or higher (tag with “A”).

•          Hero items, regardless of price (tag with “H”).

•          Drives or devices that hold proprietary content, regardless of price (tag with “C”).

•          Transferable Software (such as Showbiz, Movie Magic), regardless of price (tag with “S” 1).

•          Electronic devices with a value of USD 250 (EUR 250 / GBP 250) or higher (tag with “E”).

•          Other items of value at the Production Accountant’s discretion (tag with “O”).

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.

Please treat Marketing, Public Relations (PR), and X-Ray 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 AZS 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 PE.

The Production Company representative must upload a copy of the wrap memo and checklist to the designated Box folder before show wrap. Please report any incomplete or outstanding items to your PE and PFE. If you have a refund inbound to Amazon MGM Studios, please notify your PFE. Close out all outstanding petty cash floats, deposits, accounts receivable accounts, and ensure the deposit balance is zeroed out; then share a copy of the zero-balance bank statement along with final cost report within 2 months of master delivery. PE would brief you over email of other deliverables to be submitted before the final closure of the project.