Creating and Managing Budgets in Xero

Introduction

• A good budget helps track income and expenses.
• Overview of using Xero's budget manager for creating, importing, and comparing budgets.

Creating Budgets in Xero

• Accessing Budget Manager:
  • Go to Accounting > Reports > Budget Manager.
  • Create multiple budgets using "Add New Budget".
• Setting Up a Budget:
  • Example of tracking different business areas (departments/cost centers).
  • Begin budget from October with three months of actual income and expenses (October, November, December).
  • Budgets can last up to 24 months; longer budgets require importing (up to 5 years).
• Entering Budget Figures:
  • Example: Budgeted sales for October set at $15,000.
  • Use green arrow for consistent monthly figures or adjust by amount/percentage.
  • Over-typing figures for specific months (e.g., December sales increase).

Exporting and Importing Budgets

• Export to Spreadsheet:
  • Export budgets to Google Sheets or Excel to manage data easily.
  • Use spreadsheet functions (e.g., freezing rows, copying figures) to update budget data.
• Import Process:
  • Export as XLS or CSV files for import back into Xero.
  • Import the updated budget into Xero's budget manager.

Creating Regional Budgets

• Create budgets for different regions (North, South, etc.) using tracking categories.
• Copying Budgets:
  • Copy existing budgets to quickly create new ones (except the overall budget).
  • Use "Save as Copy" to prevent overwriting.

Historical Budgets

• Import historical budget figures to complete budget tracking.
• Example: Importing a 5-year budget (September 2022 - August 2027).

Evaluating Performance Against Budget

• Budget Variance Report:
  • Compare actual performance against budgeted figures.
  • Red and green arrows indicate negative and positive variances.
  • Filters available for specific departments or cost centers.
• Account Watch List:
  • Dashboard feature to track key accounts.
  • Shows current month and year-to-date figures with the option to display budget columns.

Conclusion

• Review and adjust budgets regularly to maintain financial health.
• Users are encouraged to provide feedback and ask questions for further assistance.