How do I forecast wages in Futrli?
There are two methods to forecast wages in Futrli. For UK, AU and NZ wage setups you can use the Import tool. If you're unable to use the Import feature, you can use manual predictions instead.
This guide runs through an example approach that creates separate predictions for the initial P&L movement, then the outgoing net wages, PAYE (tax), and National Insurance.
📎NOTE: This is a UK example, but you can use the same principles for other regions/setups.
All accounts used in this example are for demonstration purposes only. The accounts you use will be specific to your organisation.
In our example is detailed information on each prediction. However below is an overview of each prediction created in the example:
Prediction 1 - This records the movement of the gross wages from the P&L account to the holding wages account on the balance sheet
Prediction 2 - This records the movement of the net wages total from the holding wages account to the wages payable account on the balance sheet
Prediction 3 - This records the movement of the net wages total between the wages payable account and the bank
Prediction 4 - This records the movement of the PAYE (tax) total from the holding wages account to the PAYE (tax) payable account on the balance sheet
Prediction 5 - This records the movement of the PAYE (tax) total between the PAYE (tax) payable account and the bank
Prediction 6 - This records the movement of the National Insurance total from the holding wages account to the National Insurance payable account on the balance sheet
Prediction 7 - This records the movement of the National Insurance total between the National Insurance payable account and the bank
Example of a payroll forecast
In this example, we look at a payroll scenario in which we wish to record gross wages on our profit and loss as occurring on one date, but also need to make our actual net wages, PAYE, and National Insurance payments on separate dates.
In this example, we're forecasting the wages for one member of staff, Sally, who earns £24,000 per year.
Sally's breakdown is:
Gross income | £24,000 |
Net wages | £1,733.30 |
PAYE (tax) | £190.50 |
National Insurance | £76.20 |
We enter our initial gross wages prediction as a non-cash transfer, then the following predictions for net wages, PAYE (tax) and National Insurance against the balance sheet.
We can use the 'Accounts Impacted' tool within the prediction to see the impact on both impacted accounts.
Prediction 1 - Recording gross wages as a 'No Cash' item
First, we create a new prediction against our 'Salaries' account.
The prediction is titled P1: Sally's Gross Wages
As Sally's gross income is £24,000, we use the 'Formula' precision method and divide the £24,000 by 12 for the 12 months
The prediction has a monthly output on the 1st of the month
It's a 'Non cash transfer' and the balancing account is the current liability account 'Staff Costs Payable'
Prediction 2 - Move the net wages total into the appropriate balance sheet account
Prediction 2 moves the net wages total from the 'Staff Costs Payable' account on the balance sheet to the appropriate wages payable account.
The prediction is titled P2: Sally's Net Wages 1
The prediction is created using the 'Repeating' method, with -£1,733.30 as the fixed amount every month
It's a negative figure as we're debiting the 'Staff Costs Payable' balance sheet account
The prediction is on the 1st of the month
It's a 'Non cash transfer' and the balancing account is the current liability account 'Wages Payable'
Prediction 3 - Entering net wages payment
We now enter Sally's net wages payment as a monthly outgoing.
The prediction is titled P3: Sally's Net Wages 2
To record this, we create a new prediction against the 'Wages Payable' current liability account and use the 'Repeating' method
Sally receives £1,733.30 on the 27th of each month. The amount is added as a negative, as the prediction will be debiting the 'Wages Payable' liability account
The prediction will need to be set to have 0% VAT/GST/sales tax
It will be a 'Same day payment'
📎NOTE: The two predictions will now mean the 'Wages Payable' account has a net figure of zero.
Prediction 4 - Move the PAYE (tax) total into the appropriate balance sheet account
📎NOTE: Prediction 2 and prediction 3 are now repeated for PAYE (tax) and National Insurance, starting with PAYE (tax).
Prediction 4 moves the PAYE (tax) total from the 'Staff Costs Payable' account on the balance sheet to the appropriate PAYE (tax) payable account.
The prediction is titled P4: Sally's PAYE (tax) 1
The prediction is created using the 'Repeating' method, with -£190.50 as the fixed amount every month
It is a negative figure as we're debiting the 'Staff Costs Payable' balance sheet account
The prediction is on the 1st of the month
It's a 'Non cash transfer' and the balancing account is the current liability account 'PAYE Payable'
Prediction 5 - Entering PAYE (tax) payment
We now enter Sally's PAYE (tax) payment as a monthly outgoing.
The prediction is titled P5: Sally's PAYE (tax) 2
To record this, we create a new prediction against the 'PAYE Payable' current liability account and use the 'Repeating' method.
The payment will be -£190.50 on the 27th of each month. The amount is added as a negative, as the prediction will be debiting the 'PAYE Payable' liability account
The prediction will need to be set to have 0% VAT/GST/sales tax
It will be a 'Same day payment'
📎NOTE: Prediction 4 and prediction 5 will now mean the 'PAYE Payable' account has a net figure of zero.
Prediction 6 - Move the National Insurance total into the appropriate balance sheet account
Prediction 6 moves the National Insurance total from the 'Staff Costs Payable' account on the balance sheet to the appropriate National Insurance payable account.
The prediction has been titled P6: Sally's National Insurance 1
The prediction is created using the 'Repeating' method, with -£76.20 as the fixed amount every month
It's a negative figure as we're debiting the 'Staff Costs Payable' balance sheet account
The prediction is on the first of the month
It's a 'Non cash transfer' and the balancing account is the current liability account 'NIC Payable'
Prediction 7 - Entering National Insurance payment
We now enter Sally's National Insurance payment as a monthly outgoing.
The prediction is titled P7: Sally's National Insurance 2
To record this, we create a new prediction against the 'National Insurance Payable' current liability account and use the 'Repeating' method
The payment will be -£76.20 on the 27th of each month. The amount is added as a negative, as the prediction will be debiting the 'NIC Payable' liability account
The prediction will need to be set to have 0% VAT/GST/sales tax
It will be a 'Same day payment'
📎NOTE: Prediction 6 and prediction 7 will now mean the 'NIC Payable' account has a net figure of zero.
📎NOTE: Once all predictions have been created, you'll be able to see the movements against all four accounts, each with a net monthly figure of zero.
