𝗛𝗼𝘄 𝘁𝗼 𝗰𝗵𝗲𝗰𝗸 𝘁𝗵𝗲 𝗖𝗔𝗦𝗛𝗙𝗟𝗢𝗪 𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀

As a small business owner in Australia, obviously knowing that more money coming into the business than going out is essential for success. Keeping on top of BOTH your income and expenses is paramount so you don’t lose track of expenses blowing out or income dropping down.

One effective way to achieve this is by regularly monitoring the CASH FLOW in your business.

Did you know that the Profit & Loss report most likely won’t be giving you the full picture.

Xero has a Cash Summary report that will help.

Here’s how you do this
#1 In Xero, go to Accounting > Reports > Select Cash Summary report
#2 Select the current month
#3 Compare with the previous months in the current financial year
#4 In the “MORE” button – select Gross – to include GST as this will give you the total income and expenses not the net.
#5 Untick the “DECIMALS” box – as we don’t need to worry about those pesky cents right now.
#6 Then, hit the “UPDATE” button.

TIPS
#1 You may prefer to export this report to Excel for easier viewing
#2 Scroll down to the “SUMMARY” at the bottom and review the “NET CASH MOVEMENT” and the “CASH BALANCE”
#3 If the numbers are all positive – that’s a great start
#4 If the numbers are negative – then it’s likely there is more money going out than coming in and you will need to review.

If you would like some help reviewing your cashflow numbers, feel free to get in touch with us.