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 and 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 to add that extra layer of insight to your reporting and insights.
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 CSV as your export option.
Once downloaded, we will eventually need to make a few tweaks, save the file and then finally upload into the Futrli platform. Before we make these tweaks, we need to head into Futrli and navigate to the 'Forecasting' section. This is where we can build everything from budgets to scenarios, to detailed cash flow forecasts. We want to create a new forecast and will be selecting ‘Import from CSV’ as our Scenario Creation method:
This allows us to upload into Futrli any forecasts we’ve created elsewhere, 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 the Futrli budget template.
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:
The Finish Line
Once we’re happy, we can upload our CSV into Futrli and view our newly made cash flow projection.