Make sure you don’t under-forecast backdated pay awards
We all know that pay awards never go through on the dates you expect them to/budget for (frustratingly!).
This is a particular issue this year with the support staff pay awards still yet to be agreed. It’s vital you are forecasting for these accurately and factor this into the budget, so it doesn’t come as a shock when you need to pay out for all the back pay.
Here's some advice
- Set up your staffing contracts with increments e.g. April for Support and September for Teachers (We always suggest building this in year-to-year for all staff – therefore planning for a worst case scenario!)
- Each month, ensure you run a monthly payroll reconciliation – this will highlight any 'variances' against budget
- Please note that Teachers in September will be showing a 'variance' due to the pay award that may not go through for another couple of months
- Make sure you carry this 'variance' forward to the next month – this ensures you are still budgeting for it and don’t have a nasty surprise when it eventually goes through
- If needs be, do the same in the following month. This time you might have 2 months of accumulated 'variance' due to the pay awards
- When the pay award does finally go through this will net off. You’ll have budgeted for it and won’t have any nasty surprises!
SBS Budgets is the ideal budget planning and financial forecasting tool to allow for this. Not only does it contain built-in payroll reconciliation, but importantly this will show variances, with an option to carry these forward.
If your existing budgeting software doesn’t do this, not only will it be forecasting incorrectly but it will give you extra manual work as well!
"From our very first conversation I have found everyone at School Business Services
to be extremely professional and helpful. Where many other companies thought
they couldn’t help us, the team at SBS worked hard on a bespoke solution for our
federation which does exactly what I wanted it to and links seamlessly withIRIS Financials (Formerly PS Financials). Days spent on payroll reconciliation each
month have been reduced to just two or three hours."
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