What is the cost of Labour?
As a rule of thumb total labour costs are a massive 70% of an organisation’s expenses. Some companies will obviously be less, some more but for a median of 70%, why wouldn’t you want be as careful as you possibly can to control a huge overhead.
So its good to know that Forecast 5 has a really helpful salaries and wages modelling feature that allows you to do just that; keep close track of your total employee costs.
Consider - the calculations are based on the following built in features:
- UK Category One National Insurance for Employers and Employees (with the Employee rate to be reduced by 2% effective 6 January after the recent Budget announcement);
- UK PAYE tables (including PAYE and NI rates for Scotland);
- Multiple Pension capability, Employers and Employees
- Bonuses
- Commissions as a function of sales lines, manual entry, hot-linked values or per formulae
- Seasonal workers
- The capability to model hourly, weekly, monthly or annual paid workers
- In addition, for companies with large payrolls, Forecast 5 has a bulk import subroutine, which, additionally, allows payroll costs to be allocated against individual cost or profit centres
Once Actuals are entered, you can access the Variance Analysis: what values were budgeted for the month and the YTD – with variances being thrown off in percentages or £/$ – enabling the Board to scrutinise and question large variances or inconsistencies.
And there is an Employee Report where budget figures for each employee (or groups of employees) throughout the company are listed, together with respective NI, PAYE and Pension deductions.
In addition, each forecast payment can be traced to the P&L or, for the liabilities to HMRC and pension providers, to the balance sheet. Full traceability, full auditability. How much more transparent can you get?
And if full salary transparency across the board is not wanted – Forecast 5 can offer its Admin Pack that enables C-Suite individual salaries to remain confidential.
And finally, if detailed wages and salaries budgeting is too granular – F5 allows budgeting at a high level with broad-brush estimates for Wages and Salaries on the one hand and for tax & NI on the other.
If you are searching for a tool to really control costs, why not download a free 21 day trial of Forecast 5 and try for yourself!
