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.
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.
Let Xero do the hard work so you can dedicate your time to what you do best, running your business.
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