The Missing Residuals
Our client, a writer and producer, was unaware that he was owed $11,000 in residuals. We discovered the missing income by doing what is for us a routine but important task: reconciling his payroll statements and checking deposits.
A little over a year ago we landed a new client: the creator, writer, and producer of a successful television show on CBS. The writer had not engaged a Business Manager in the past and had no system in place to manage his financial activity. He never reconciled or tracked his compensation from CBS Television nor did he cross-reference residual payments from the Writers Guild of America (WGA) that were processed through CBS.
One of our first tasks as his Business Manager was to organize our client’s financial transactions in Quickbooks. We soon observed that the total payroll deposits in his checking account did not match the year-to-date totals listed on his paystubs. Two years of available records revealed three gaps in his earnings statements totaling $11,000. We accessed his WGA records online and pinpointed the missing residual income. Our contact at the WGA confirmed that three checks issued by CBS had never been cashed. The network prepared replacement checks and our client celebrated the unexpected windfall with the long-delayed purchase of editing equipment for his studio. Reconciliation is a critical element of internal control and our policy is to formally tick-and-tie all income, expense and balance sheet accounts to external third party reporting.