There are some costs that are paid at different times throughout the year eg: Audit (Decemeber and June) – I want to know what is the best method to show this in the WC TAB?
ACC fee accrual – paid annually
Audit Fee accrual – 6 monthly
Credit accrual– annual
ACC accrual – quarterly
How do I show the days for this?
Thanks,
Angus
Hi Angus,
The working capital within Modano is typically used for the conversion of income statement items to their cash flow.
What you're looking at there is more related to accruals and provisions, which we tend to model more specifically.
There are a couple of plug-and-play options however.
The first is to insert the OTHER BALANCE SHEET ITEMS (ALL MOVEMENTS, INTEREST) module:
This will allow you to enter the recognition timing as well as the cash flow.
The second option is to use the working capital modules but enter a sequence of working capital timing assumptions akin to the following:
This will give you the synthetic smooth recognition and one-off payment. The cash payment delays can be set up to repeat the 150/120/90, etc.
My preference is probably the former as it's using the more suitable modelling structure for the task. Cheers. J.
Hi Angus,
You might also want to look at how delayed cash payments are calculated in modules such as the Corporate Taxation module within monthly (or monthly historical & forecast) models, as shown below. This calculation basically facilitates the cash payment of accrued tax payable in a single period, while allowing the user to assume different assessment frequencies and the number of months between assessment and payment.
Your requirement would be somewhat simpler, as it looks like you're really just looking to pay a number of periods of accrued expenses in one single period. But the concept is similar.
There's some pretty complex formulas used to achieve this, but you can check them our via the Budgeting & Planning (Chart of Accounts 5, Single Component) example model, which you can access via the Modano tab, Open menu, Example models, as shown below.
I hope this helps. You can always request support from our team if you'd like help.