How to create a Budget in Xero 2022

In this video, Lenah Oduor talks you through how to easily create a budget in Xero.
Time stamps
00:00 - Creating a new budget
01:17 - Budget period
02:31 - Entering Information
04:14 - Annual Expenses
05:40 - Exporting Budget

Video transcript in the comments.

[ghawkaccounting]

00:00 - Creating a new budget

Hi. In this video I'm going to show you how to create a budget in Zero. So, you can see I'm logged onto the Zero demo account. And to get to budget, I'll click accounting, go to reports, and then click Budget Manager. So you may already have a budget in here and it will take you straight to that budget. You can change that view to standard view. To create a new budget, you click the arrow on the right-hand side of the name of the budget, and then click add New budget. Give your budget a name. We're going to call this one Best Case Scenario. It is recommended to have different scenarios of budgets just to st test out some of your ideas and see what impact it might have on on the, on the money side of things. In order for you to go ahead with your ideas, if you are using different regions, you can create a budget for a specific region, but in this case, we just going to create an overall budget that covers the whole organization and then click save.

01:17 - Budget period

Okay. When you have saved your budget, then you can decide when you want your budget to start so you can decide. In this case, let's go with November, 2022. And you can decide whether to start your budget on a blank slate with absolutely no figures at all, or you can bring in some actuals. If you have an active zero account that has got some actual figures in here from your business, you can bring in the actuals and it just shows you what the actual performance in each line was so that you can make you can budget using numbers that are a little bit more realistic. You can decide to budget for a short period of time, three, six or 12 months, whichever one you choose. Just select that. And in this case, we are going to use 12 months, and we are going to click update. If we want more space on the screen. If you click the wide view, then it just opens up the whole page and collapses the menus that are not required, just to make it easier to have to visualize the whole budget.

02:31 - Entering information

So to enter information in the budget. So in this case our sales, we would click into the row and the column that we want. So sales in for November, 2022. And just type in the figures that we want. In this case, we put in 20, 000 pounds and to make it easier to enter the other month, if we click on this green around the right-hand side, then it gives us an option of applying the same amount on a fixed rate to all the other previous amounts. So if I click that, you can see all the other months go to 20, 000 pounds, we can also come in here and decide to increase or decrease by a particular amount. So let's say reduce by 500 pounds, and you can see it works out the calculations for us. If we wanted it to add by 500 pounds or, or a thousand pounds increase per month and you click apply, it just does that automatically. And the same thing happens if you're using percentages. You can use positive percentages or negative percentages just to as, as you expect the changes to happen. So if you're happy with that click that and then you will do the same for the other expenses. So cost of goods sold, I don't know, I don't know. You probably expect them to be 6, 000 pounds and we want us to go the same figure across. We'll do that for all income expenses, advertising on and on and on until we have finished putting all our monthly figures.

04:14 - Annual Expenses

Now it is important to remember that not all expenses happen in equal instalments from month to month. So you might have some things that happen just once a year and on, on specific renewal dates. Let's say for example, things like insurance, it may be that you pay your insurance annually in let's say April. So it would be good, it was important for you to go to that particular month and put the lump sum that you expect to pay in that particular month so that even though there's no monthly expenses expected in the month prior to that, then you know, to expect the big amount when it is due for renewal. Another top tip is once you have done one month from top to bottom, so income and expenses, and you are quite certain that most of those transactions will repeat themselves in the following months when you've clicked on the amount. You can see there's an arrow here at the top that comes in at the November. So if you click on that, it allows you either to make changes for a full month so you can clear all the figures for that one month, or you can apply going forward for each month. The same figures, both for income and expenses going forward to the right hand site. So that's a quick tip for making it easier for you to manage your budget.

05:40 - Exporting Budget

Once you've finished preparing it, if you wanted to edit it further or you wanted to have it in a different format, you can always export it by clicking the export button. You can export it to Google Sheets or to Excel or to a CSV file. And if For any reason you've completely messed up and you don't need it and you don't want this budget anymore, you can always delete it by clicking the delete button. Hope that you found that helpful. Let me know if you have any questions about how to create a budget, and I'll be happy to help. Thank you. Bye.