How to turn your Xero Budget into a Cashflow Forecast

The Xero Budget Manager is a useful introductory tool to business forecasting, which allows you to enter your monthly budgets for each of your Profit & Loss accounts. In this guide, we’re going to look at how you can apply payment terms to your Xero Budget so that you can transform it into a Cash Flow Forecast.

Written by Ross MacLeod

The Preamble

The Xero Budget Manager is a useful introductory tool to business forecasting, which allows you to enter your monthly budgets for each of your Profit & Loss accounts. Whilst this allows for a clearer picture of when you expect invoices to be raised, there are no associated payment terms, which prevents you from being able to accurately project the impact on your bank balance. In this guide, we’re going to look at how you can apply payment terms to your Xero Budget so that you can transform it into a Cash Flow Forecast.

Step One

Before you can start projecting how many Ferraris you’re going to buy, you’ll first need to navigate to Xero and load the Xero Budget Manager. This is where you’ll find any Budgets you’ve previously created in Xero. With the Budget Manager loaded, select the Budget you wish to transform into a Cash Flow. This will need to be exported from Xero in order for payment terms to be added to it. Click Export in the bottom right and then either CSV or Excel as your export option.

Xero Budget Manager

Step Two

Once downloaded, we’re going to open the file and then load FUTRLI, which is where we’ll be uploading our exported budget after making a few tweaks. Within FUTRLI we’re going to select the Scenarios section. This is where we can build everything from budgets, to scenarios, to detailed Cash Flow forecasts. We want to create a new Scenario and will be selecting ‘Import from CSV’ as our Scenario Creation method:

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Step Three

This allows us to upload any forecasts we’ve created elsewhere into FUTRLI, where we can flex them, make copies and report on them against our actuals. After naming and setting the length and start date of our Scenario, we’re going to download FUTRLI’ Budget template:

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Step Four

This template allows us to adjust our existing Xero Budget and apply credit terms to it. All we need to do is copy over our data from our Xero sheet and then enter our expected credit terms. If we want to create a more granular Cash Flow, we can even go a step further and create Forecast items within our account lines, allowing us to split out payments so that they tally with our expectations.

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The Finish Line

Once we’re happy, we can upload our CSV into FUTRLI and view our newly made Cash Flow projection.