Creating a monthly budget for your business using Xero will take some time and effort to begin with, but by following Steven’s process, you can make the process as easy as 1, 2, 3.

Guest’s Background:

Steven Briginshaw is an international bestselling author, speaker, award-winning entrepreneur & business mentor. Steven’s mission is to revolutionising accountancy, small business & business education to give existing and future entrepreneurs what they need to help solve meaningful problems & build purpose-led impact-making businesses. He’s a former chartered accountant & has worked with small businesses since 2000.

How to Generate a Monthly Budget Using Xero

Step 1: Understand where you want to be.

Step 2: Exporting your current accounts data to a Microsoft Excel document.

Step 3: Use the figures from last year as a base for your budget for this year.

Step 4: Budget for your overheads – fixed costs.

Step 5: Budget your variable costs.

Step 6: Review your gross profit and adjust to reflect business goals

Step 7: Save the excel file and import it to Xero as a budget for the next period. Step 8: Review, tweak, rinse and repeat.

Bonus Step: Create a one-page financial overview to aid in analysis.

If you are reviewing your budget every month, you can see exactly where the money is going and make any adjustments that need to be made. The key thing to remember is that once you set your budget, it will need constant tweaking to ensure that you are matching seasonal fluctuations, promotions, and new product launches. It can be daunting when you see that the amount of money coming in is less than what is going out, but this is quite often normal for new businesses.

As long as you have your fixed costs taken care of, then you can see what profits you have that can be reinvested back into the business. Only when you have an honest budget will you be able to work towards achieving your financial goals.

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