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This feature is included with
Access the Forecast Settings
The Forecast Settings enable you to set the basic components of your forecast's foundation.
To access the Forecast Settings:
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How to set up your forecast
When setting up a forecast for the first time, review and configure the following settings.
We recommend doing this before you begin forecasting your Profit & Loss:
Choose your default accounts
Under the Accounts tab of the Forecast Settings, you will see your Default Accounts. The default accounts are where balance sheet movements will hit unless otherwise specified.
To set your default accounts:
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Your selections will automatically save.
📝 Note: You will only be able to select accounts with the appropriate account classification. For example, when selecting a default Accounts Payable account, you will only have the options of accounts that have been classified as Accounts Payable.
You can change an account's classification in the 'Chart of Accounts' section of the Company Settings.
If you created a Quick Start forecast, Fathom has attempted to select the appropriate default accounts based on their classification and amounts, but feel free to change the selections.
After you’ve selected your default accounts, move on to the Tax Settings. You’ll set up other account settings when you forecast your Balance Sheet and strategise how to achieve your business goals.
How do you decide which accounts are your default accounts?
Your default accounts will likely be the accounts you think of as your “main” accounts, or the accounts to which most amounts are posted.
So, the Cash/Checking account that receives most of your cash or the Accounts Payable account that receives most of your Accounts Payable transactions.
Example: By default, any Accounts Receivable amounts will hit the selected Accounts Receivable account. You can send Accounts Receivable amounts to other accounts when you choose the rules to forecast the Balance Sheet, but the account chosen as the Default account will be used unless otherwise specified.
Tax Settings
Under the Tax tab of the Forecast Settings, you can set up how taxes will be forecast.
The Tax settings allow Fathom to automatically calculate your projected tax amounts and their resulting Balance Sheet movements as you make changes to your forecast.
For consumption & withholdings taxes, you can enter tax rates, choose the Profit & Loss accounts they apply to, and the Balance Sheet accounts they impact.
For tax expenses, like corporate income tax, you can create a formula to calculate the tax amount, select the Profit & Loss account to record the tax expense, and the Balance Sheet account to which it will post.
There are three tax options:
Tax Type | What it is | Examples |
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 taxes, and other taxes levied on goods and services that are consumed. |
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A withholding tax is an amount that an employer withholds from employees’ wages and pays directly to the government. |
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Taxes linked to an expense account on the P&L.
For example, a corporate tax is a levy imposed by the government on a firm's profits. 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 that the business owes the government. These types typically have an expense account to capture the tax (or super), which reduces the earnings. |
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Learn details of how each tax option is forecast, can be edited, or can be created from its respective articles:
What about the General forecast settings?
The 'General' settings can be changed and addressed as you set up your forecast or after you set up your forecast.
You can learn more about the 'General' settings from the following articles:
Next steps
After you set up your default accounts and tax settings, you can continue the 'Forecast your Baseline' workflow by choosing the rules to forecast your Profit & Loss.
Learn more