How do I plan for a hire or release of an employee?

With Fowardly, you can easily plan and project a number of different scenarios, including how a hire or release of an employee can affect your cash flow.

Steps to Plan a Hire an Employee

1. On the Cash Flow page, click on Plan a Scenario. 
2. Click on Hire/Release an Employee. 
3. Fill out the hire details:
   
   • Employee Name. Enter the employee's name.
   • Start Date. Pick a start date for the candidate's employment.
   • On-boarding Cost. This value could be any one-time cost that incurs during the onboarding of this employee. You may either use the slider to specify this cost or enter it directly by clicking on the displayed onboarding cost section. 
   • Chart of Account. This should be the Chart of Account that the onboarding cost would fall under. 
   • Employee Wages. You may either use the slider to specify this employee's salary or enter it directly by clicking on the displayed salary value section. 
   • Chart of Account. This should be the Chart of Account that the employee's salary would fall under. 
   • Benefits. You may either use the slider to specify this employee's benefits or enter it directly by clicking on the benefits section. Points to keep in mind:
     • This value is always expressed as a percentage of Employee Wages; and 
     • The maximum possible value for this field is 30%.
   • Chart of Account. This should be the chart of account that the benefits would fall under. 
   • Repeat Every <value>. Enter a numeric value for the repetition frequency. In the same field, select the frequency period from any of the following values from the dropdown control. When you select the frequency period as Weekly or Bi Weekly, the system pops up another control that lets you select the specific day/s of the week when the repetition will occur.
     
     • Daily
     • Weekly
     • Bi Weekly
     • Monthly
     • Semi Monthly.
   • End Date. Enter the date for termination of the employment if it is not deemed as continuous employment, else retain the default value of None. Possible values for this field are: 
     • None (open-ended -- nothing to select)
     • After<numeric value> (number of occurrences)
     • By (select date from date picker)

Example: Hire an Employee

Now, let's walk through a practical example where a company is deciding whether or not to onboard a potential employee. Suppose the prospective employee's name is Javi Drewall. Javi is a senior executive who is asking for a $15,000 signing bonus, plus the company will incur $5,000 in training costs. He is asking for $120,000 per year as his salary.

• • Employee Name: Javi Drewall
  • Start Date: 02-01-2023
  • On-boarding Cost: $20,000 
  • Chart of Account: Other Business Expenses
  • Employee Wages: $5,000 ($120,000 per annum)
  • Chart of Account: Wages & Salaries
  • Benefits: 5% 
  • Chart of Account: Employee Benefits
  • Repeat: 1 every Bi-weekly
    • Repeat every other Friday
  • End Date: None

Steps to Plan a Release

1. On the Cash Flow page, click on Plan a Scenario. 
2. Click on Hire/Release an Employee. 
3. Fill out the release details:
   
   • Employee Name. Select the current employee's name from the drop-down menu.
   • Predicted Salaries. The salaries considered for this projection. This defaults to the next twelve months. Use the checkbox against each month to deselect the salaries from the projection.

Example: Release an Employee

Suppose you wanted to assess the financial impact of releasing an employee named Jamie Eldemann.

• • Employee Name: Jamie Eldemann
  • Predicted Salaries: Jan' 23 to Jan' 24 (Select all)

You can now assess how much working capital you will free up over the next 12 months by releasing Eldemann.