A. PRE-PRODUCTION CONSULTATION
With expert guidance, you have the opportunity to significantly mitigate your potential residual obligations as well as strategize the timing of those payments for your cash flow needs. We can take the following steps to ensure you take advantage of these opportunities available to you:
- Before the decision is made to produce a project, we can estimate what the residual cost may be, based on certain assumptions such as the projected cast list, anticipated guilds that will apply, and ultimate sales projections.
- Based on our extensive knowledge of the guild basic agreements, we can customize a strategy in regards to casting the project to ensure you are taking advantage of all potential residual reduction benefits, such as the utilization of residual over-scales and buyouts.
- Negotiation with potential distributors regarding who will bear the residual obligations & to what extent.
B. MANAGEMENT AND COMPLIANCE
Now that your project has been produced and sold or as sales continue, the residual reporting and payment obligations to the guilds need to be handled on an on-going basis. Specific services include
1. RESIDUAL REPORTING
Detailed statements will be prepared to report the exploitation that has occurred for each project to the guilds, in accordance with guild regulations. These reports will be audit proof, as it will include the appropriate supporting detail and footnotes to seamlessly explain the activity being reported, thus reducing time necessary to deal with a potential guild audit.
2. RESIDUAL PAYMENTS
Now that you have reported your collections and/or airdates, not only do residual payments need to be made to each individual performer, but the proper pension, health & welfare payments, and taxes need to be withheld & remitted to the appropriate guild, and federal & state agencies. To accomplish this, we have partnered with a top entertainment payroll company in the industry to deliver these services.
3. MANAGEMENT REPORTS
We can customize various management & tracking reports to fit your needs, enabling you to effectively & efficiently manage your reporting & payment obligations, including:
- Reporting & Payment Tracking: Provides an overview of the progression of the residual process from the preparation of the residual reports to the processing of the residual payments, on a title by title basis, so you always know the status of all your obligations.
- Residual Estimate Reports: Provides an updated snap shot of your current & prospective residual obligations, by guild & by title, on a monthly or quarterly basis, as well as the detail behind the calculations so you can look ahead & plan your cash flow accordingly.
- Residuals Master List: Provides an all-inclusive list of all residual bearing titles, the applicable guilds & any other pertinent information that specifically applies to a title, serving as a vital tool to manage your residual obligations for your entire library.
4. ULTIMATE RESIDUAL CALCULATIONS
To remain in compliance with U.S. GAAP accounting principles, you are required to properly accrue for residual obligations in your G/L. There are a few accrual methods that can be utilized and we can find the method that works best for your company & ensure that residuals are accurately accrued for in your G/L system. This is also a useful tool to project your estimated residual obligations for the entire useful life of a specific project. Ultimate residual calculations should be updated at a minimum on a quarterly basis.
5. HANDLING OF GUILD CLAIMS & AUDITS
Our many years of experience dealing with the various guilds and the relationships we have established contribute to our overall approach in mitigating potential late payment liquidated damages assessed on late residual payments which can quickly accumulate if not handled efficiently. Guilds will also inquire about your rights & obligations for specific projects. In some cases, with the proper research, guild claims can be completely dismissed. We can manage all of your guild claims & inquiries, limiting your risk, and potentially reducing your obligations while building a strong relationship & developing a positive reputation with the guilds. Also, we have extensive experience handling guild audits. We are able to provide detailed explanations as well as supporting calculations & documentation
There are many guild regulations and each guild has its own Basic Agreement, with different rules for every market the project is sold, that continuously change. Not only do we have extensive knowledge of all guild basic agreements, but we can expertly handle all of your residual reporting & payment obligations and management functions seamlessly.
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