Xero’s Statement of Cash Flows: A True Picture of Success

xero cashflow statement

Cash flow is the crucial measure of success for every small business. No matter how good your Profit and Loss (P&L) account looks, your business cannot function without sufficient cash flow.

In an ideal world, you will always have more cash flowing in than out, enabling you to make investments and improvements to your business as it grows. To make such decisions, you need to have an accurate picture of the health of your cash flow and with the launch of online accounting programme Xero’s latest report that’s now even easier.

Statement of Xero Cash Flows

Technology is transforming accounting and with Xero’s Statement of Cash Flows Report you will be able to see all the money in your business, where it came from and how it has been spent. It is fundamentally different from your P&L, which will tell you if you have made a profit but may include income and expenditure that has yet to be paid, such as bills and invoices.

Your Statement of Cash Flows only reports on cash and presents the crucial information you need in three key categories:

  1. Operating Activities – cash going in and out of the company as a results of trading, such as supplier bills, customer receipts and staff wages
  2. Investing Activities – such as the purchase of new assets, receipts from the sale of assets and new investments
  3. Financing Activities – such as loan repayments, money put in or taken out by the owners, proceeds from new loans

Customisable to your needs

No two businesses are the same and Xero’s Statement of Cash Flows Report recognises that by providing customisable elements to meet customers’ different needs.

The layout editor allows you to customise how and where different items are displayed within the three key categories, allowing you, for example, to split debits and credits. Filtering options also allow you to easily create departmental and cost centre reporting.

Getting the most from your reports

Xero recommends working closely with your accountant, preferably one with a proven track record in transforming businesses using online accounting, to get the most from your reports. Your accountant’s understanding of your business will help ensure you customise the report to get the information that is right for your business. Crucially you will be able to track and compare periods and trends across your business and, with your accountant, make predictions and informed business decisions regarding investments and improvements.

“We believe that running a business and managing your tax affairs should be kept as simple as possible,” says Jon Green, co-director of Approved Accounting, a Xero Gold Partner. “Tools such as Xero’s Statement of Cash Flows Report makes these aspects of business life even easier and will allow business owners to make informed decisions about their future plans.”

If you need our expert accountants advice now about how Xero’s Statement of Cash Flows Report could help your business email Jon now.

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Approved Accounting Ltd

We are an accounting firm for small to medium sized businesses. We pride ourselves on a personal service. Please contact us if you would like advice and for our latest bookkeeping pricing packages.

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