Exploring the Role of Accountants in the Entertainment Industry
Well-heeled mobsters, glamorous showgirls, and fantastical mega-casinos define Las Vegas, the world’s most famous monument to reckless abandon. But this desert fantasyland is also a center of mainstream leisure, drawing tens of thousands of new residents each year.
This article explores how management accountants leverage their skills and talents to help businesses thrive in this ever-changing business landscape.
Overview of the Industry
The Vegas entertainment industry is a unique and vibrant segment of the local economy. It is a multi-billion dollar industry that drives visitor spending and provides jobs in a way that no other sector can. Its importance to the city’s overall economic health is exemplified by its $3.9B spending impact, $173M wage and salary impact, and 27,700 jobs in 2018.
This entertainment industry comprises various components, including restaurants, nightclubs, hotel suites, concert venues, and hair-raising rides. It also includes a growing number of celebrity chefs, other name-brand restaurants, and high-end retail spaces. It has been shaped by many outside forces, including changing consumer habits and a desire for refined luxury.
In addition to these newer elements, the industry has been transformed by large-scale investments made by visionaries. They shifted the focus of casino construction away from downtown and towards areas south of town on the Strip, where they could build more upscale resorts.
This trend continues today as the city strives to attract millennial visitors. It is also evolving away from a dependence on gaming revenues and toward a more balanced approach to entertainment, hospitality, and convention business. Although 2021 was a challenging year for Las Vegas due to travel restrictions, there are signs that the industry is recovering quickly.
Accounting Issues
The city of Las Vegas, Nevada (or simply “Vegas”), has undergone an extraordinary transformation from a backwater sleepy town to one of the world’s leading entertainment destinations. The area’s economic fortunes have always been tied to a steady stream of discretionary income from US residents and, more recently, international visitors. Massive business visionaries drove the development of the city and its Strip. These investments brought jobs and wealth to the region and helped propel it into its current form.
The recession of the late 2000s was a challenge that almost tore the city apart. But it has recovered nicely and shows continued hotel room revenue and convention attendance growth. With more projects on the Strip and elsewhere, the future looks bright for this ever-changing entertainment destination.
As the industry continues to grow, accounting professionals must play a role in maintaining accurate financial records and reporting. It helps to protect the company from regulatory penalties and ensures all tax obligations are met. While many businesses may think hiring a bookkeeper or doing the books themselves is sufficient, experience has shown that an accountant in Las Vegas can provide valuable insight and assistance for companies in any industry.
Reporting Issues
The entertainment industry faces many reporting issues. The first and most apparent is the need to satisfy regulatory, tax, and financial reporting obligations. That is particularly true for businesses with international operations or investments, as they must contend with the added complexity of complying with foreign rules and regulations.
Another issue is the need to protect intellectual property and reputation. For example, the cyber theft and leaking of film scripts, private emails, and financial data is a severe problem. The impact of these losses can be catastrophic for the business.
Finally, ensuring health and safety protocols are in place is also essential. Slips and falls are the most common cause of live-event insurance claims, so event organizers must take steps to minimize the risk. Lastly, the recent COVID crisis and the tragic shooting incident on a film set highlight the need for strict compliance with health and safety protocols.
Overall, the entertainment industry is a fascinating and dynamic sector that continues to thrive and grow. However, many significant risks need to be considered to continue to thrive. These include new business models, theft of IP, and violent acts.
Financial Analysis
The Las Vegas entertainment industry has to meet many regulatory and financial reporting requirements. That is particularly true of those businesses with international operations, investments, or partnerships. In addition, myriad state and federal tax laws require careful analysis.
Accountants with their tax planning and compliance expertise can be valuable to the business community in these challenging times. A good accountant can provide insights to help a company stay ahead of the competition and capitalize on opportunities as they arise.
For individuals, it assists with online payroll processing, preparing custom reports, including unemployment claims, and depositing EFTPS taxes. It can also assist with IRS audits and preparation of tax returns. For businesses, it assists with tax projection and planning, accounting compilation and review, bookkeeping services, and entity formation guidance.
It also helps clients navigate changing tax laws and financial projections.
Regarding industry leaders, the top four public accounting firms have offices in the Vegas area. However, many independent accounting firms can also provide quality services to businesses in the gaming, entertainment, hospitality, and other industries.
