There are several ‘Forecast Settings’ configurations that can be managed by navigating to the ‘Cog/Gear’ icon in the lower left hand corner of the main forecast grid.
Here you can find and manage the applicable settings:
- General: Download your forecast to Excel, view the drawdown settings, and delete your forecast or reset the baseline.
- Accounts Settings: Add account linkages and relationships to help you scale the impact of your financial modeling.
- Tax Settings: Audit and manage settings across your accounts that control tax status, tax % and account links.
Outlined below are each of the settings areas and how these settings will impact your forecast in Fathom.
General settings allow you to manage your general forecast settings including excel downloads, drawdowns and some bulk options allowing you to delete or ‘reset’ your forecast.
You can download your forecast directly into Excel, by using the ‘Download Excel' button. This will prompt you to select which of the three financial statements you’d like to download (Profit & Loss, Balance Sheet, and Cash Flow Statement). You can also select the range of actuals that you’d like to appear (up to 12 months) as well as the forecast periods (up to 36 months). These statements will download into separate excel tabs.
The Drawdown field allows you to change the time period of drawdown for your actuals (closing Balance Sheet) Accounts Receivable and Accounts Payable balances.
Here you can reset or delete your forecast and start over. Note these are both permanent actions, and you will not be able to rollback or recover these changes.
Resetting your forecast is a non-recoverable action that will clear all your current baseline data including:
From this screen, you will be able to reset which default value rules and timing profiles you want to use in your reset forecast.
Delete your entire forecast and start from scratch. This allows you to set the forecast up again using the onboarding fields.
❗Note: Before deleting your forecast, you can download an Excel copy of your forecast for your own records. You can also provide a reason for deleting the forecast.
The ‘Accounts’ tab is where you can set up some ‘default account’ settings. This area allows you to add account linkages and relationships to help quickly calculate the financial impact of the movement for certain accounts.
This allows you to link accounts together for timing profiles, posting purposes and for tax settings. You can set defaults for the following accounts:
- Accounts Receivables
- Accounts Payable
- Current Earnings
- Unearned Revenue (prepaid):
- Prepaid Expenses
You can then drill down and take this even further by setting up each individual relevant account linkages. For example, with each revenue account you can dictate the cash, accounts receivable, and unearned revenue account that rely on the sales or revenue from this account.
For cost of sales, you can dictate the cash, accounts payable and prepaid account. For expenses you can dictate your cash, accounts payable and prepaid expenses.
Account linkages automatically calculate the accrual, time down and posting for a given account. For example, based on a timing rule applied in Fathom, we can automatically calculate the Balance Sheet implications of changes to sales. i.e. increases in revenue timed down to the applicable accounts receivable account and cash account on the Balance Sheet.
You are also able to edit, link future accounts, and view the microforecasts that are linked to these future accounts from this area. Simply use the ‘three dot’ overflow menu, to select the action you’d like to perform.
These settings are designed to be set up once; however they can be edited at any time as business needs change.
The next global settings tab is the ‘Tax settings’ area. Fathom allows for three different overall tax types to be set. Within each of these three areas, multiple rules and formulas can be set up, giving you ultimate control over the calculation of each.
There are three types of tax setups in Fathom forecasting:
- Consumption Tax: A consumption tax is a tax on the purchase of a good or service. Consumption taxes can take the form of sales taxes, tariffs, excise, and other taxes on consumed goods and services.
E.g. GST / VAT / Sales Tax
- Withholdings: A withholding tax is an amount that an employer withholds from employees’ wages and pays directly to the government.
E.g. PAYG, Medicare, leave provisions
- Tax Expense/Income Tax/ Superannuation: Taxes linked to an expense account on the P&L. For example, A corporate tax is a levy placed on a firm's profit by the government. A firm's operating earnings are calculated by deducting expenses including the cost of goods sold (COGS) and depreciation from revenues. Then, tax rates are applied to generate a legal obligation the business owes the government. These types typically have an expense account to capture the tax (or super) which reduces the earnings.
E.g. Income Tax, Corporate Tax, Company Tax, Corporations Tax, Super
Consumption Tax Settings
For a consumption tax, the percentage rate adds to the cash taken, with the additional amount stored in a liability account. E.g. we earn $100 revenue. We take $110 cash. The extra $10 is stored in the GST liability account.
To set up a consumption tax, hit the ‘+ Add type’ button, this will prompt you to fill in some details that will be applied to accounts.
- Posting To Account
- Paid From Account
- Default Rate
- Accounting Method: allows you to dictate if your GST is calculated on the Cash or Accrual method.
- Payment frequency: defaults to quarterly, however use the more options menu to have full control over the payment schedule.
Once added you can edit the rule to be active on some, or all accounts, as well as changes that need to be made to the parameters defined upon creation.
If a new rule needs to be applied to future months, say 10 months into the forecast, use the ‘three dots’ more options menu to add a new variation/ overriding tax rule to the layout.
Withholding Tax Settings
For a withholding, the percentage rate takes away from the cash taken, with the additional amount stored in a liability account. E.g. we recognise $10,000 in salaries. We pay out $7,000 cash. The extra $3,000 is stored in the PAYG withholdings account
To set up a withholding tax, hit the ‘+ Add type’ button.
Income Tax/ Tax Expense Settings
Fathom allows you to create formula driven rules to accrue income tax expense and liabilities that hit both your Profit & Loss and impact the balance sheet. Fathom income tax formulas are very flexible and multiple can be created all posting to different accounts.
To get started hit the green ‘Add Account’ button, and link an expense account, as well as a paid to and from linkage. Once set up you can define a formula for use that will calculate and automatically post to your relevant tax liability and expense accounts.
Example: EBIT * .385