Xero has released the Statement of Cash Flows Report. A single, simple but flexible way for small businesses to generate a report that summarizes the cash flow position of a business, informing decisions around cash flow management.
What benefits does a cash flow statement provide to a small business?
- Are you trading at a profit? Regardless of having to buy new equipment or raising money via loans, this shows you if you’re profitable. And if not, why not?
- Did your cash drop because you invested in things that you expect to make you money in the future? This could be buying new equipment, or classic investing in shares etc.
- Did you end up with more money in this period because you took out loans? If so, then that tells you in the future that you will lose cash to repay the debt.
While the Profit and Loss includes income that might not yet have been paid by small business customers, the cash flow statement looks at all cash receipts and cash expenditure. It also groups the money going in and going out of your business into useful categories.
To read more information about new feature, you can visit the Xero blog.