As with anything without data, planning a quarter without financial data is guesswork. Planning one with current, accurate Xero reports is strategy. In this post I will give you a practical 60-minute quarterly planning workflow using six specific Xero reports.
The six Xero reports for quarterly planning
| 1 | Profit and Loss: last quarter vs prior year quarter | Run your P&L for the quarter just completed with a comparison to the same quarter last year. This gives you the trend: is revenue growing, is margin holding, are costs under control? The year-on-year comparison removes seasonal noise that a month-on-month comparison can create. |
| 2 | Budget vs Actual: year to date | Run the Budget vs Actual report for the year to date. This tells you whether you are on track against your annual targets, where you are ahead and where you are behind. The variances from this report feed directly into your next 90-day plan. |
| 3 | Aged Receivables: current | Your current debtors position. Total outstanding, proportion overdue and specific clients or invoices needing attention. This informs your cash collection priority for the coming quarter. It might be less of a priority if you have kept up to date with collections. |
| 4 | Cash Flow Statement: last quarter | Where cash came from and where it went. The operating cash flow section tells you whether the business is generating cash from its core operations. Compare to the prior quarter to see whether the trend is improving or deteriorating. |
| 5 | Profit and Loss by Tracking Category | If your tracking categories are set up correctly, this shows gross margin by service line. Which lines are most profitable? Which are below target? This informs your pricing, resourcing and client selection decisions for the coming quarter. |
| 6 | Balance Sheet: current vs prior quarter | Your equity position, working capital and debt level compared to the prior quarter. Shows whether the business is getting financially stronger or weaker in structural terms. |
The 60-minute quarterly planning workflow
Run all six reports before your quarterly planning session. Then work through this structure:
| Time block | What you do |
| Minutes 1 to 20 | Read all six reports. Answer six questions: What was my gross margin? Am I on annual target? What is my cash trend? Which debtors need attention? Which service line is most profitable? Is the business getting stronger? |
| Minutes 21 to 40 | Set your one financial target for the quarter. Identify three strategic priorities. For each priority write two or three weekly actions. |
| Minutes 41 to 55 | Name the one risk most likely to derail the plan. Write a one-sentence contingency for it. |
| Minutes 56 to 60 | Schedule three in-quarter review dates. Add them to the calendar before closing the session. |
A quarterly plan built on current Xero data is a plan built on evidence. Every goal is grounded in a financial number. Every action is connected to a metric. Every review produces a data point. This is what it means to run a business with financial clarity.
That is as simple and as difficult as it gets! It is really simple. If you have not got current data, that is your starting point. It always is. As stated above, it is the foundation on which the Xero reports are built. Without a found ation, the house will fail down or at least, not be very good looking
Want to run your quarterly planning session with a qualified adviser who knows your Xero data and your goals? Book a free discovery call with Bruce
About the author
Bruce is the founder of BC Accounting Services (BCAS), a Xero Partner and Certified Adviser based in South Africa. He works with SME owners and growing businesses to build financial clarity, strategic direction and measurable performance through the PCP Method: Purpose, Clarity, Performance.
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