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