Cash Flow & Petty Cash

Here's a truth that catches filmmakers off guard: a production can be perfectly on budget and still get into trouble, because having the money isn't the same as having it when you need it. Here's the principle: cash flow is the management of timing — making sure money is actually available in the account to pay bills as they come due, since financing often arrives in installments while costs hit on their own schedule — and petty cash is the disciplined handling of the small physical cash spent on set, which is easy to lose track of and adds up faster than anyone expects. Cash flow and the budget are different things: the budget says you have enough money overall, but cash flow is about the sequencing — investor money might arrive in tranches, a tax rebate might come months later, but the crew needs paying this Friday and the equipment deposit is due now. A cash-flow plan maps money in against money out over time so you never hit the moment where you're technically funded but temporarily can't pay. Petty cash is the on-the-ground cousin: the small cash floats given to departments for daily expenses, which without discipline leak away untracked. Both are about the practical reality of money moving, and both are places productions quietly bleed. This chapter covers keeping the cash flowing and controlled. (As always, general education, not accounting advice — real productions run these with an accountant.)

Managing the money as it moves

What cash flow and petty cash involve:

• Cash-flow timing. Mapping when money comes in (often in installments) against when costs must be paid — so funds are there when bills are due.
• Avoiding the gap. Spotting the moments where you're funded overall but temporarily short, and planning around them (deposits, deferrals, timing).
• Petty cash floats. Small cash amounts issued to departments for daily on-set expenses — convenient, but easy to lose track of.
• Petty cash discipline. Every dollar out gets a receipt back; floats are reconciled regularly — no receipt, no record, no control.
• Reconciliation. Matching cash issued to receipts returned, so petty cash always balances and feeds the cost report.
• Fraud & leakage guard. Tight cash handling protects against both honest loss and dishonest skimming — cash is the easiest thing to lose.

Keeping the cash controlled

The mindset for this chapter is that money has to be in the right place at the right time and accounted for at every step — so you plan cash flow to avoid timing gaps, and you run petty cash with strict receipt-for-cash discipline, because cash is the easiest money to lose and the hardest to recover. On cash flow: build a simple timeline of money in versus money out. Financing rarely lands as one lump — it comes in installments tied to milestones, and some money (like tax rebates) arrives well after you've spent it. Meanwhile costs have their own clock: deposits up front, payroll on a cycle, vendors on terms. The job is to line these up and spot the gaps before you hit them, so you can arrange a deposit schedule, negotiate terms, or time a payment to avoid the awful moment of being funded-but-broke. On petty cash: the discipline is simple and non-negotiable — receipt for every dollar. Departments get a float; every purchase comes back as a receipt; floats are reconciled regularly so cash issued always equals cash spent plus cash remaining. Without this, petty cash is a black hole: small amounts vanish untracked, the cost report loses accuracy, and you're exposed to both honest leakage and outright skimming (petty cash fraud is a real and classic problem). Tight handling protects the money and keeps the accounting honest. Both practices feed the bigger picture — a controlled cash flow keeps the production solvent day to day, and disciplined petty cash keeps the cost report accurate. A few honest points. First, on budget isn't the same as liquid — you can have enough money overall and still be short at the wrong moment, so plan the timing, not just the total. Second, map money in against money out — a simple cash-flow timeline that spots gaps early is what prevents the funded-but-broke crisis. Third, receipt for every dollar — petty cash without strict receipt discipline is a black hole that leaks money and corrupts your records, so reconcile relentlessly. Fourth, guard the cash — physical cash is the easiest money to lose to leakage or skimming, so tight handling is both practical control and fraud protection. Cash flow is about having money when it's needed; petty cash is about controlling the small on-set spending — both are where productions quietly bleed, and both reward discipline. That closes the Core Craft module. In Module 3 we handle the records, people, and reporting, starting with bookkeeping. Next, bookkeeping and records.