Time for your very own Spring Budget?

Mar 28, 2024 | Fintech Friday

Budgeting is a pillar of success for businesses of all sizes. It’s not just about tracking expenses and revenues, it’s about setting strategic goals, giving you the tools to make informed decisions, and ensuring you have long-term sustainability.

So maybe it’s time for your very own Spring Budget? Although I suspect this one won’t incur hollering after every point.

We all budget, but to varying degrees – whether that be having a plan all in your head, through to the ultimate goal of having this budget ingrained within your accounts software – which is where Xero’s Budget Manager steps in.

Understanding the Budget Manager

Xero’s Budget Manager is a powerful tool designed to simplify and streamline your budgeting process, all included within your current Xero subscription fee. It has the ability to include budgets for multiple scenarios, and to track this against live figures as they become available.

This functionality is delivered in a typically-Xero way, as it’s built for business owners, with a user-friendly interface. Applying a month-on-month percentage increase to your sales just takes three clicks! Once built, this provides a truly holistic budgeting function within your accounts, allowing you to build and report upon.

Simulating different scenarios

In fluctuating economic conditions, businesses at the very least need to be prepared for best and worst case scenarios. But what about budgeting matters to you?

  • What if I hire that new staff member?
  • What if I change my pricing?
  • What if I buy that machinery?

Budgeting should be tailored to you, and by having it fully integrated to your accounts software, it allows you to tailor your scenarios to meet your visions.

The Spreadsheet Super-Fans

The die-hard Excel fans may be livid reading the above, as a lot of people have their own very specific spreadsheet that they’ve manipulated for years to fit their requirements.

But what if I told you there was an amicable middle ground?

Xero has the ability for a direct import of your pre-created budget to the software from a spreadsheet. This may sound like additional work but I will reiterate that, by having your budget in your accounts software, you’re working with live updates over time. Which ties in nicely to my next point…

Creating accountability

For me, the whole premise of budgeting revolves around creating accountability for your figures – otherwise, why create a budget in the first place?

Straight away, you will think about sales targets not being met or expenses exceeding what you’d planned. But what about the implications of you creating these accountability measures?

Having your budget embedded in your accounts software, running your budget against your actuals as they appear is almost instantaneous. You will be able to highlight anomalies to your figures, whether that be due to an increase in expenses or revenue, or perhaps even caused by something which you need to factor into future budgets.

I’m a big fan of empowerment for employees, and budgets create metrics you can choose to share with them. For you as a business owner, this budget has been created to meet your short, medium and long-term financial goals – whether that be the creation of ability to scale the business, maximise your margins, or even allow you to take a step back from day-to-day activities.

Realistically, the choice is yours, but a solid budget can make your vision a reality.

How can we help?

Xero’s Budget Manager offers businesses a comprehensive solution for efficient budget management and financial planning, without over-complicating it. By leveraging the Budget Manager, businesses can create detailed budgets, simulate theoretical scenarios, create accountability measures and analyse performance over time. For me, budgets are as much about reflecting on and learning from the past, as they are on looking at the future.

For more on getting the most out of your Xero software, contact our Digital Advisory team today – email fintech@haroldsharp.co.uk, call 0161 905 1616 or contact Ryan below.

Ryan Alderson, Head of Digital Advisory
T: 0161 905 1616
DD: 0161 926 0512
E: ra@haroldsharp.co.uk