Xero Tip Of The Month November 2017 - Budgets In Xero

Are you thinking that budgets are difficult to produce in Xero? – They’re not! Budgets are an important tool that allow you to plan and understand how you are performing in your business. Budgets allow you to plan ahead and then you can more easily understand why your performance is either exceeding or not meeting target.

The actual process of setting a budget also gives you the opportunity to step back and review how things could be done differently in your business. Asking yourself questions such as what has worked well and what has not?

When you have created a budget you can then run your Profit and Loss Report in Xero showing Actual versus Budget as shown in the illustration below. Here we can see both the Actual versus Budget Profit on both a monthly and year to date basis.


Xero makes it easy to set up an ‘Overall Budget’ and you can also set up ‘Departmental Budgets’ if you are using the tracking categories in Xero. If you are using categories to track services it can be useful to have a budget for each service area within the business. For example many of our creative Xero users often set up a budget for each of their service areas such as SEO, Digital, Branding etc. Our construction clients may be using budgets to track the performance for each of their different sites currently being worked upon. These are just a couple of examples of the many ways that tracking and departmental budgets can be used.

You can create the budget in two different ways. The first uses the Xero Budget Manager worksheet shown in the image below. Select the start date, if you would like to include any actuals and then the period you would like the budget to cover. Then select ‘Update’. You can then fill in the fields manually or click the green arrow and use the simple formulas.


The simple formulas allow you to automatically update the other month fields by; the same fixed amount each month, adjust by a set amount each month, or adjust by a percentage each month.


The second way to create the overall budget is to import it via a CSV file. I would recommend that you take this approach if you have a large number of departmental budgets you are trying to create. To create the budgets using a CSV: select ‘Budget Manager’ and then click the ‘Import’ button. You will see there is a CSV template that Xero provides so that you can make sure you have the correct format. Fill in the budget and then re-import into Xero.


Once you have created your budget you can Export it out to a CSV, Excel or Google Docs format to check and review.



To find out more information about Creating Budgets in Xero visit the Xero Business Help Centre.

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Previous Tips

October 2017 – Bank Rules In Xero – Update

September 2017 – Tracking In Xero In Xero

August 2017 – Manage User Privileges In Xero

July 2017 – Tailored Account Codes In Xero

June 2017 – Payment Types In Xero

May 2017 – Inventory Items In Xero

April 2017 – Xero’s Inbuilt Calculator

March 2017 – Expense Claims In Xero

February 2017 – Customise The Dashboard In Xero

January 2017 – Customisable New Reports In Xero

December 2016 – Email Templates In Xero

November 2016 – Bank Rules In Xero

October 2016 – Smart Lists In Xero

September 2016 – Files in Xero

August 2016 – Direct Bank Feeds In Xero

July 2016 – Managing Bills and Purchases in Xero

June 2016 – Shortcuts In Xero

May 2016 – Email Integration

April 2016 – Recurring Sales Invoices

March 2016 – Two Step Authentication

February 2016 – Xero Search

January 2016 – File Storage in Xero

December 2015 – Invoice Reminders

November 2015 – Xero on the go, with Xero Touch

October 2015 – Invoice Payment Terms

September 2015 – Sales Invoice Customisation

August 2015 – Business Performance Review

July 2015 – Cash Coding In Xero

June 2015 – Xero to Xero Billing

May 2015 – Find and Recode

April 2015 – Online Invoicing