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Journals & Schedules in Forecasting

Forecast loans, depreciation, amortization, dividend payments and other Balance Sheet movements

Updated over 3 weeks ago

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How do journals and schedules work in forecasting?

Journals and schedules help you forecast balance sheet movements.

Journals forecast one-off or recurring movements of the same amount between Balance Sheet accounts. They can also be used to forecast movements to Balance Sheet-derived P&L accounts (e.g. Interest, Depreciation/Amortisation, Dividends, etc.).

Some examples of movements that can be forecast with journals include:

  • Asset purchases, including inventory purchases

  • Loan amounts

  • Dividend payments

Schedules forecast movements between accounts over time, with the amounts differing from period to period. They can be movements between Balance Sheet accounts or between the Balance Sheet and Profit & Loss accounts derived from the Balance Sheet (e.g. interest and depreciation/amortisation P&L accounts).

Some examples of what you can forecast with schedules include:

  • Depreciation/amortisation of an asset

  • Loan repayments, including interest payments

Although you can use each on its own, journals and schedules are often used in conjunction with one another.

Want to forecast the impact of Revenue, Cost of Sales, and Expenses on the Balance Sheet?

Schedules connect interest expense/revenue and depreciation/amortisation P&L accounts to the Balance Sheet.

To forecast how Revenue, Cost of Sales, and Expense accounts impact Cash, Accounts Receivable, Accounts Payable, Unearned/Deferred Revenue, and Prepaid Expense accounts, you need to use timing profiles.

💡Smart Tip: To forecast tax on the Balance Sheet, use the forecast’s Tax Settings.

How to create a journal entry

To set up a journal in your forecast:

  1. On the main grid, navigate to the Balance Sheet account that requires a journal entry.
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  2. Click on the cell for the period in which the entry should occur.
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  3. In the menu on the right, select + Add custom journal. If you do not see this option, you may need to click on ‘Baseline totals’ first.
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  4. Fill in the relevant information:
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    1. Name
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    2. Accounts impacted by the journal (Click + Add a new line to include additional Balance Sheet accounts)
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    3. Debit value(s)
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    4. Credit value(s)
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    5. Recurring nature (e.g. one-off or repeating every x month(s))
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    6. If recurring, starting and ending months
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  5. Select Create.

📝 Note: You will not be able to create the journal unless all the movements in the journal are balanced. The journal must also have a name.

How to create a schedule in your forecast

To set up a schedule in your forecast:

  1. On the main grid, navigate to the Balance Sheet account that requires a journal entry.
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  2. Click on the cell for the period in which the entry should occur.
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  3. In the menu on the right, select + Add schedule. If you do not see this option, you may need to click on ‘Baseline totals’ first.
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  4. Choose the other account that the schedule will impact. It can be a Balance Sheet or a Balance Sheet-derived P&L account.
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  5. Select the calculation method:
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    1. Constant/Growing: Enter a monthly amount for the schedule. You can also add a monthly increase or decrease.
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    2. Straight Line Depreciation: Enter the purchase date, purchase price, expected useful life, and residual value. The depreciation for each month will be calculated as (the purchase price – residual value) / the useful life.
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    3. Loan Repayment/Interest calculation: Only an option on Balance Sheet accounts classified as Short Term or Long Term Debt or P&L accounts classified as Loan Interest. Input parameters for calculating Principal & Interest or Interest-Only repayment of a loan. You also have the option to model a large, significant payment at the end of the loan with a balloon payment.
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    4. % of Opening Balance: Increase or decrease the baseline value of the account by a percentage each month.
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    5. Direct Entry: Enter the schedule values for each month.
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  6. Click Create

Examples of forecasting with journals & schedules

How to forecast a loan and repayment

The recommended method for forecasting a loan differs slightly for new or existing loans:

Forecast repayment of an existing loan

If you’re forecasting the repayment of an existing loan, you can use a schedule:

  1. Navigate to the Balance Sheet in the main forecasting grid.
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  2. Click on a cell for your loan account.
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  3. In the menu that opens, scroll down to the ‘Schedules’ section. If you do not see it, you may need to click on ‘Baseline totals’ first.
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  4. If you used the Quick Start method to create your forecast, you may see some existing schedules (Learn how these existing schedules were calculated).
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    1. Click on one of the schedule accounts to see how the schedule impacts your forecast.
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    2. If you’re happy with the schedule, you can leave it as is. If you're unhappy with the schedule, click the Back arrow.
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    3. Click the Three dots icon next to each schedule account and select Delete.
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  5. If there are no schedules on the account, you can create a schedule:
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    1. For the Linked account, you can select:

      1. The Cash account that will repay the loan or

      2. The Loan Interest account on the P&L.
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    2. Choose Loan Repayment Calculation as the ‘Method of Calculation’.
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    3. Fill in the information. For the interest rate, you will set the interest rate as a driver in your forecast:

      1. Choose to create a new driver or use an existing driver in your forecast.

        1. If you’re using a new driver, type in the interest rate and name the driver.

        2. If you’re using an existing driver, select the driver.
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    4. Click Create.

To see how the schedule is impacting your forecast, you can click the Magnifying Glass icon to see the underlying movements of your Balance Sheet account.

Forecast a new loan

If you’re working on forecasting the baseline, we suggest waiting to forecast new loans until you're ready to forecast what-ifs.

Use a microforecast to forecast your new loan, so you can easily change the timing of the loan and/or use a future account to forecast the loan.

To forecast a new loan with a microforecast:

  1. Create a microforecast.
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  2. When you're creating it, select the 'Add a loan' wizard.

If you’re using the new loan to purchase an asset, then we suggest using the ‘Purchase an asset’ option.

Can you forecast a new loan without using the microforecast wizard?

Yes. You can forecast a new loan directly on your baseline or within an existing microforecast.

We recommend using a microforecast, which allows you to easily adjust or experiment with the loan timing. However, you may be encountering the microforecast limit or need to add a new loan to an existing microforecast.

You can forecast on the baseline of the Balance Sheet or within an existing microforecast:

  1. To forecast the loan, create a journal:
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    1. Increase the loan account by the amount of the loan
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    2. Increase the Cash/Asset account by the amount of the loan
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  2. To forecast the loan repayment and/or interest, create a schedule:
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    1. Click + Add schedule
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    2. For the Linked account, you can select:

      1. The Cash account that will repay the loan or

      2. The Loan Interest account on the P&L.
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    3. Choose Loan Repayment Calculation as the ‘Method of Calculation’.
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    4. Fill in the information. For the interest rate, you will set the interest rate as a driver in your forecast:

      1. Choose to create a new driver or use an existing driver in your forecast.

        1. If you’re using a new driver, type in the interest rate and name the driver.

        2. If you’re using an existing driver, select the driver.
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    5. Click Create.

To see how the journal and schedule are impacting your forecast, you can click the Magnifying Glass icon to see the underlying movements of your Balance Sheet account.

How to forecast an asset purchase and its depreciation

The recommended method for forecasting an asset purchase and/or its depreciation differs slightly for new or existing assets:

Forecast the depreciation of an existing asset

If you’re forecasting depreciation of an existing asset, you can use a schedule:

  1. Navigate to the Balance Sheet in the main forecasting grid.
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  2. Click on a cell for your asset account.
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  3. In the menu that opens, scroll down to the ‘Schedules’ section. If you do not see it, you may need to click on ‘Baseline totals’ first.
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  4. If you used the Quick Start method to create your forecast, you may see some existing schedules (Learn how these existing schedules were calculated).
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    1. Click on one of the schedule accounts to see how the schedule impacts your forecast.
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    2. If you’re happy with the schedule, you can leave it as is. If you're unhappy with the schedule, click the Back arrow.
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    3. Click the Three dots icon next to each schedule account and select Delete.
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  5. If there are no schedules on the account, create a schedule.
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    1. Some likely Method of Calculation options for forecasting depreciation would be:

      1. Straight Line Depreciation

      2. % of Opening Balance
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  6. Click Create.

To see how the schedule is impacting your forecast, you can click the Magnifying Glass icon to see the underlying movements of your Balance Sheet account.

Forecast the purchase and depreciation of a new asset

If you’re working on forecasting the baseline, we suggest waiting to forecast new asset purchases until you're ready to forecast what-ifs.

Use a microforecast to forecast your new asset purchase, so you can easily change the timing of the purchase and/or use a future account to forecast the asset.

To forecast the purchase of a new asset with a microforecast:

  1. Create a microforecast.
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  2. When creating the microforecast, select the 'Purchase an asset' wizard.

Can you forecast the purchase of a new asset without using the microforecast wizard?

Yes. You can forecast the purchase of a new asset directly on your baseline or within an existing microforecast.

We recommend using a microforecast, which allows you to easily change or experiment with the timing of the purchase. However, you may be encountering the microforecast limit or need to add an asset purchase within an existing microforecast.

You can forecast the new asset purchase and its depreciation on the baseline of the Balance Sheet or from within the existing microforecast:

  1. To forecast the asset purchase, create a journal:
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    1. Increase the asset account by the purchase amount.
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    2. Decrease a Cash account by the same amount.
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  2. To forecast the depreciation of the asset, create a schedule:
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    1. Some likely options for forecasting depreciation would be:

      1. Straight Line Depreciation

      2. % of Opening Balance
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  3. Fill in the information for the schedule.
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  4. Create the schedule.

To see how the journal and schedule are impacting your forecast, you can click the Magnifying Glass icon to see the underlying movements of your Balance Sheet account.

How to forecast dividend or equity payments

To forecast dividend or shareholders’ equity payments, you can use a journal:

  1. To forecast a dividend payment, create a journal entry on one of the accounts.
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    1. Decrease the Retained Earnings account.
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    2. Decrease the Cash account.
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  2. Or, to forecast a share issue with a journal:
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    1. Increase the Equity account.
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    2. Increase the Cash account.

To see how the journal impacts your forecast, you can click the Magnifying Glass icon to see the underlying movements of your Balance Sheet account.

How to forecast inventory

You can learn how to forecast inventory from our ‘Forecast Inventory’ article.

Next steps

🎉 Congratulations on taking a significant step in forecasting your Balance Sheet!

Now that your baseline is forecast, you can move on to planning and strategising for other possibilities:

Forecast What-ifs

Did you complete all of the steps for forecasting your baseline? You can check here.

Learn more

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