This feature is included with Fathom Pro - the plan with access to all of Fathom's features. Companies on Portfolio can be upgraded to Fathom Pro at any time.

How the Balance Sheet is forecast

In Fathom, the Profit & Loss is linked to the Balance Sheet, and most Balance Sheet movements are forecast from the Profit & Loss.

Balance Sheet forecast figures are almost entirely calculated based on the accounts' opening balances and the impacts from the Profit & Loss. Following this logic, Fathom enables you to forecast most Balance Sheet movements directly from the Profit & Loss.

As part of our 'Forecast the Baseline' workflow, we suggest forecasting the Profit & Loss baseline values before you begin forecasting the Balance Sheet.

Which Balance Sheet accounts are impacted by the Profit & Loss?

In the Forecast Settings, you can select default accounts for several Balance Sheet classifications.

Click the Cog/Gear icon in the lower-left corner of the forecast.
Select the Accounts tab.
Use the drop-down menus to select default accounts for each classification.

Any Cash, Accounts Receivable, Accounts Payable, Unearned or Deferred Revenue, or Prepaid Expense amounts from the Profit & Loss will affect the default accounts, unless otherwise specified.

Example: A company selects their main bank account as the default Cash account. Unless otherwise specified, all the Revenue they receive from the Profit & Loss will be forecast to impact that main bank account eventually.

If you're following our 'Forecast the Baseline' workflow, you would have already set up your default account linkages. Learn more about setting up default accounts from our 'Configure your Forecast Settings' article.

What about other Balance Sheet accounts?

You can change the account linkages for individual Profit & Loss accounts if you have Profit & Loss values that should impact different Balance Sheet accounts.

Example: A manufacturing company has a Cost of Sales account named ‘Product Sold’ on the Profit & Loss. The account linkage for the ‘Product Sold’ account is set to the ‘Finished Goods’ inventory account on the Balance Sheet instead of the default Cash account.

When an amount is recorded in the ‘Product Sold’ account on the Profit & Loss, the ‘Finished Goods’ account on the Balance Sheet will be decreased.

You can choose account linkages for individual accounts when you set up timing profiles.

Certain Profit & Loss accounts do not have account linkage settings. In such cases, the Profit & Loss and Balance Sheet amounts are forecasted using schedules or via the tax settings of the forecast. Learn more about this from our ‘Forecast the Profit & Loss’ article.

Forecast the Balance Sheet Workflow

You can forecast your Balance Sheet figures with:

Set up...	To forecast...
Timing profiles	Cash impacts from Revenue, Cost of Sales & Expense accounts Accounts Receivable Accounts Payable Deferred or Unearned Revenue Prepaid Expenses or Prepayments
2. Journals & schedules	Asset Purchases/Sales Depreciation/amortisation Loan amounts & repayments Equity changes (e.g. Dividend payments)

📝 Note: Want to forecast inventory? See our 'Forecast Inventory' article.

📝 Note: Starting forecasting for the first time? Forecasting the Balance Sheet is part of our 'Forecast the Baseline' workflow.

Learn more