Xero has a budget tool and two reports built on it. Between them they cover what most small businesses need, which is a monthly budget for income and expenses and a monthly check of how the actual figures compare. This guide covers where Budget Manager is, how the overall and additional budgets work, the two budget reports, and the limits worth knowing before you start. We checked the screens in Xero's Demo Company on 19 October 2026.
Reportpost is independent and not affiliated with Xero.
Where budgets live in Xero
| Where | What it's for | Export |
|---|---|---|
| Budget Manager | Entering and editing budgets, month by month, per account | Budget file (import and export) |
| Budget Variance report | Actual figures beside the budget, with the variance | PDF, Excel, Google Sheets |
| Budget Summary report | The budget itself, by period | PDF, Excel, Google Sheets |
All three are under Reporting > All reports, in the Financial performance section.
Setting up a budget in Budget Manager
Budget Manager opens on a grid: one row per account and one column per month, with a total at the end. Only profit and loss accounts appear (income, cost of sales and expenses), so you can't budget for balance sheet items such as loans or stock. At the top you choose:
- Select Budget: the budget to edit, or Add new budget.
- Start: the first month shown.
- Period: how many months to show at once (3, 6, 12 or 24).
- Actuals: none, or the last 3, 6 or 12 months of actual figures shown beside the grid, which helps when you base next year on last year.
Type the amounts in and save. Once you've typed an amount, the apply formula icon can fill the following months using a formula. For anything more than a handful of accounts it is usually quicker to use the Export and Import buttons under the grid: export the budget file, fill it in a spreadsheet and import it back. Our free Xero budget template tool fills that import file in your browser if you'd rather not work in the raw file.
Xero's help centre says you need the administrator role, or Standard with access to reports, to edit or delete budgets.
The overall budget and additional budgets
Every organisation has one Overall Budget, which can be edited but not renamed or deleted. You can add more budgets, for example a revised forecast, a stretch target, or a budget for a tracking option such as a branch or department. A budget tied to a tracking option lets you compare that part of the business with its own plan in the Budget Variance report. See Xero reports by tracking category and reporting for multiple branches.
Additional budgets don't add up into the overall budget. If you budget each branch separately, the overall budget still has to be entered (or imported) on its own. Xero said in July 2025 that rolling tracking budgets up into the overall budget "isn't on our immediate roadmap to build right now" (Xero Product Ideas).
The newer Budgets tool
Xero's help centre also describes a newer tool, Budgets (Early access), alongside Budget Manager. Xero's help articles say the new tool can't import or export budgets, so if you rely on the spreadsheet route, check which tool your organisation has. The Demo Company we used still had the classic Budget Manager described here.
Which plans include budgets
Xero's pricing pages list budgeting on Comprehensive and Ultimate in the UK and on Growing and Established in the US, with a limit of three budgets on Comprehensive and Growing. Xero's US budgeting page also says budgeting is included in all three US plans, so check what your plan includes before you plan around it.
The Budget Variance report
This is the report most people mean by budget vs actual. By default it shows this month and the year to date, each with columns for Actual, the budget, Variance and Variance %. You can pick another budget at the top, change the date range, filter by tracking category, and choose a ready-made format on the left:
- Current and previous 3 months
- Current financial year by month
- Current financial year by month, actual and budget
- Month to date comparison
- Year to date comparison
In the Demo Company, which tracks by region, the list also offers Compare Region. The report has Edit layout, so you can add or remove columns, and Save as keeps your version as a custom report. It exports to PDF, Excel or Google Sheets.
Read each variance with the account type in mind: more income than budget is good news, but more spending than budget is not.
The Budget Summary report
The Budget Summary shows the budget on its own: each budgeted account by month, with a total. You choose the budget, the start date and how many future periods to show. It has no Edit layout, but it exports to PDF, Excel or Google Sheets like the variance report. It's handy for sending the agreed budget to a board or a lender at the start of the year. More in our explainer on budget reports in Xero.
Limits worth knowing
- No balance sheet budgets. The request has 225 votes. Xero wrote in July 2025 that "building this feature isn't in our plans" and suggested a spreadsheet for balance sheet and cash flow forecasts (Xero Product Ideas).
- Budgets follow the account list, not your custom layout. A custom Profit and Loss layout doesn't carry over to Budget Manager (Xero Product Ideas, 230 votes).
- No forecast column. There's no column for "actual to date plus budget for the rest of the year" (a request on Xero Product Ideas).
- Budgets are read-only to apps. Xero's API lets apps read budgets and the Budget Summary, but not write budgets, and it has no Budget Variance report. Apps that show budget against actual work it out from the Profit and Loss and the budget (Xero's API spec).
For more on these, see what Xero has said about the most-voted reporting requests.
Common questions
Where are the budget reports in Xero?
Go to Reporting > All reports and look under Financial performance, or type "budget" in the search field. Budget Variance compares actual figures with the budget, Budget Summary shows the budget on its own, and Budget Manager is where you enter the figures.
How do I set up a budget in Xero?
Open Budget Manager from Reporting > All reports. Choose the Overall Budget or Add new budget, choose the Start month and the Period, and click Update. Then enter an amount for each income and expense account and click Save. For a full year across many accounts, exporting the budget file, filling it in a spreadsheet and importing it back is usually quicker.
Who can change or delete budgets?
Xero's help centre says users with the administrator role, or the Standard role with access to reports, can edit and delete budgets. To see exactly what each role can do, check Xero's comparison of user role access to reports and budgets.
Can I rename or delete a budget?
Additional budgets, yes: select the budget in Budget Manager, then use Edit to change its name or tracking category, or Delete to remove it. The Overall Budget can't be renamed or deleted, but you can change its figures at any time.
Can I set a budget for each department or branch?
Yes, if the department or branch is a tracking option. Add a budget and link it to that tracking option. In the Budget Variance report, filter by the tracking option and also pick its budget under Budget, or the branch's actuals are compared with the Overall Budget. The branch budgets don't add up into the Overall Budget, so that one still needs its own figures.
Can I base next year's budget on this year's actuals?
Budget Manager can show the last 3, 6 or 12 months of actual figures beside the grid (the Actuals option), so you can copy or adjust them account by account. For bigger changes, export the budget file and work in a spreadsheet, or use our budget template tool.
Can Xero email the budget vs actual report every month?
Not that we could find. We found no schedule option on Xero's standard report screens, so someone has to run Budget Variance and send it. An app that connects to Xero can do it for you. The next section covers how Reportpost does it.
Getting the budget comparison in front of people
A budget only helps if someone compares it with the actuals every month. Xero's standard report screens have no schedule option, so in most businesses someone runs Budget Variance after month end, exports it and sends it on. Reportpost can take that job over. It emails a Budget vs Actual and the Budget Summary as PDF, Excel or CSV on the day you choose, with the Profit and Loss and Balance Sheet in the same email if you want them. The people who get it don't need a Xero login.
Our Budget vs Actual puts the Profit and Loss for the period beside your Overall Budget, account by account. It shows the variance in money and as a percentage, and gross and net profit against budget. It works on whole months: last month, last quarter, the financial year to date, the last financial year or the last 12 months. The actual figures can be on an accrual or cash basis. For now it only uses the Overall Budget, so budgets for a branch or other tracking option aren't supported. If a schedule is split by tracking category or filtered to one option, the comparison still covers the whole organisation, and the report says so. You can try the demo with sample data.
Related: sending monthly management accounts from Xero, a charity board pack from Xero and the free Xero budget template.