Are you still handling NI adjustments manually? There is a better way.
One of the key components of a healthy bottom line is having an accurate annual budget. When it comes to maintaining the organisation’s financial health and continued success, the job of reforecasting and re-budgeting can seem like a never-ending task. Finance leaders up and down the country this week have been feverishly reforecasting following recent UK Budget announcements.
The Chancellor announced significant changes to National Insurance Contributions (NICs) for employers, set to take effect from April 2025. These include an increase in the employer NIC rate from 13.8% to 15% and a reduction in the secondary threshold from £9,100 to £5,000 per annum. TaxScape
These adjustments present several challenges for Chief Financial Officers (CFOs) and finance leaders, particularly concerning their planning and payroll systems.
Accurate projections are essential for maintaining financial stability and planning for future expenditures. The increased NIC rates will elevate employment costs, necessitating revisions in budgeting and financial forecasts.
Careful recalculation
Reforecasting annual budgets in Excel to account for such changes can be a daunting task. The process often involves manually updating numerous cells and formulas, which is not only time-consuming but also prone to error. Each adjustment requires careful attention to ensure that all linked data and calculations are correctly updated, which can be particularly challenging in complex spreadsheets with multiple interdependencies. Additionally, the lack of automation in Excel means that even small changes can necessitate a complete review of the entire budget, which is laborious and a significant drain on resources. This repetitive and meticulous work can be overwhelming, especially when deadlines are tight, and accuracy is paramount.
There is a better way
Connected planning systems offer significant advantages for streamlining budget changes. At Sempre Analytics we have recently built systems for four of our customers that calculate the NI fully so that when employee or even employer NI contributions change, they simply need to enter the adjusted calculation in one central place and the changes will flow through the whole financial planning and analysis (FP&A) model. This vastly reduces the risk of errors and saves time compared to manual updates in Excel. Overall, these systems make the budgeting process more efficient, accurate, and responsive to changes.
If this week felt more complicated than it should have, we’re here to make it easier. NI changes may be complex, but they don’t have to mean constant recalculations or data pulls. With our guidance, your team can create a seamless, efficient process that supports compliance and strategy.
