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Every business should have some financial goals and you want to be using a system that helps you to manage your actual results against your targets.
What we find, is that the understanding of the financial make-up of a business is enhanced significantly when you set targets and then report against those targets and get curious about the variances. Some good tips for establishing your financial targets are:
- Start with a review of the strategy of your business
- Set some targets around the key drivers for your business (eg no of customers, productivity)
- Use excel or another spread-sheeting program to “play” with your numbers and create some what-if scenarios
- Prepare a bottom up budget for your overheads (day to day running costs)
- Once this is done you can then easily import the targets into Xero
- Customise reports in Xero to optimise the reporting and then use of your financial goals
- Run reports each month and get curious about your variances
For a video on how to import budget data into Xero click here