There is one report in Xero that as a business owner you should be looking at EVERY.SINGLE.MONTH!

Do you know what it is? And do you know what it tells you?

Our clients often say to us – I’ve made all this profit but why have I got no cash?

They look at their profit and loss statement and see they’ve made a profit, and they’re paying tax on it but wonder why they have no cash in the bank.

While the Profit & Loss statement is important, the number one report that every business should be looking at each month in Xero, is the Statement of Cashflow.

This report lists out:

  • All the money that has come in, (not what you’ve invoiced),
  • Who has paid you in this particular period and how much
  • It details all your ongoings
  • How much GST you’ve paid
  • Salaries & wages paid,
  • Overheads, all your other costs, expenses,
  • It also includes any debt repayments
  • Any drawings you’ve taken out of the business
  • Asset payments
  • Tax payments
  • Stock purchases

Run this Xero report to see where your money is going. What we quite often see when we look at this report, is people are drawing out more money than they can afford. A bit here, a bit there but over the month it all adds up.

Also, if you’ve got a loan or debt repayments, when you run a Profit & Loss Statement, the debt repayments aren’t in there. Drawings aren’t in there. But they are all in the Statement of Cashflow.

So make sure you look at the Statement of Cashflow in Xero on a regular basis, the more you look at this report, the more you’ll understand it, the more informed you will be about your business cashflow, the better decisions you’ll make. If you want some help with understanding your cashflow, our budgeting service maybe just the thing. Tell me more about budgeting.