How to set up your own budget!

Budgeting in your business. Let’s go. Let’s get it! In this handy blog, we’ll run you through the steps to create your very own budget, so let’s get cracking.

In an ideal world, before kicking off this process, we (you) would have a full review of your reporting needs, your key metrics and the categorisation of income/expense items. This would involve a review of your profit and loss, balance sheet and chart of accounts. This is the ideal...but if not, we can still make this work!

If you are new to the budgeting “thing”, we’ll leave the ideal for another day (for now) and instead jump into the quick and easy.  

The below together with an instructional video, guides you through the process of building a budget in under an hour. Use the next few months to play, to break and to work out what works/does not work for you and your business. Make a note in the old diary to “do it all”, including a full review, around June and kick off the 2025 financial year with a whiz-bang, all bells and whistles budget.  

Let’s do this.

<10 MINUTE BUDGET>
Xero Budget Manager

• Under Reports jump into Budget Manager.
• Select the relevant parameters. If this is your first, use the Overall Budget, Start Jul 2023, Actuals 12 months, Period, 12 months.
• At this point, while you can play with the Budget Manager as is, dumping and playing with the numbers in excel allows you to produce more accurate figures and assess “live” the impact of various decisions before uploading back into Xero.

<15 MINUTE BUDGET>

• Export to Excel.

Excel Budget – The Set Up

• Open and save the file somewhere.  
• At this point you can change the numbers in this file as is and upload back into Xero; this as long as you do not move or delete any cells or add additional lines or totals.

<30-60+ MINUTE BUDGET>

• Make three copies of the tab – naming each Xero Download, Xero Upload and Budget.

• Xero Download – this tab is for reference only (in case you break it)
• Xero Upload – this tab will become the “stable” tab, for easy upload back into Xero Budget Manager.
• Budget – this is our “play tab”.

• Link the upload tab to the budget tab. Start with cell B8 on the upload tab and link to the same cell in the budget tab. Repeat for every other non-total cell in the upload tab. This process is critical to ensure we can easily upload our new numbers into Xero. It also means we can play (to an extent) with our budget tab without breaking the upload.

Excel Budget – the Budget tab

Focusing on the Budget tab, at this point, we suggest watching the instructional video but in short:

• Insert total columns for each financial year.
• Use formula to amend numbers ensuing you do not break the linked between the Xero Upload tab and this tab. You can insert rows and columns here without breaking.  
• Add section at the bottom for Cash at Bank including lines for opening and closing balances, current accounts payable and receivable and any tax or other current tax or other obligations.  

Once you are happy with the budget, copy the Xero Upload tab into it a new document and save somewhere for uploading.

‍Xero Budget Manager

• Jump back into budget manager, select Add New Budget, name and save.
• Once saved, Import the file created in above step.
• Once imported Save. This will become your new budget.  

Reporting

• Under Reports go to Budget Variance.

• Select Date Range and the Budget you just uploaded.

You can now monitor this report and track any variances between actual and budgeted numbers.  

If you want to take this to the next level, under this area you can Edit Layout (bottom left) and produce a customised report that gives you the layout and metrics which will allow you to quickly and accurate assess the performance of your business. See instructional video for more detail here.  

Happy budgeting and don’t forget we’re always here to give you a hand if you need! We’ll be delving into this one deeper at our event on Wednesday night, so if you haven’t gotten a spot for that, you can grab one HERE!