If you are wanting more information than you normally get when it comes to your monthly financial reporting, Xero delivers some quite unique numbers that you will love to look forward to. There is “life” beyond the boring balance sheet and sometimes incomprehensible income statement, and here’s how Xero delivers.
The Executive Summary is a favorite of many small business owners. Sometimes the income statement can mislead small business owners when it comes to their cash flow, and Xero reporting helps to bridge that gap by providing a cash summary of monthly inflow and outflow totals.
An income and balance sheet summary is provided as well, and then a section on Income shows the number of invoices issued and average amount. You don’t see those numbers in too many accounting systems!
The remaining executive report shows margin percentages as well as common ratios such as how many days on average it took your clients to pay you. Each of these numbers is extremely valuable, and if you would like us to help you understand how you can use each of these figures in business decision-making, please reach out and ask.
In order to get the most out of these numbers, the accrual method of reporting should be used to reduce timing differences in income and expense recording.
This six-part report is a great summary – similar to the more expensive dashboard reports – and it’s included in Xero at no additional charge.
Sales Sliced and Diced
All small business owners love watching their sales. The income statement easily provides the summary, and if you want more information, you can turn to the Sales by Item report or the Income by Contact report. The Sales by Item report is great because you can view the quantities and averages of the items that were sold for the period. The Income by Contact, which you may want to export into Excel and sort by income amount, will allow you to see your largest customers for the period.
You can also see your sales by Tracking Category by selecting the Tracking Summary report and choosing Sales as your Account Group.
Cash Is King
To determine your cash balances, the Bank Summary report shows your bank balances per Xero. The Bank Reconciliation Report lists items that have not been cleared in Xero or at the bank. And the Cash Summary report shows inflows, outflows, and net movement of cash for the period.
Best of all, the Executive Summary includes a Short Term Forecast line under the Positions section. Be sure all of your payables are recorded so that your forecast will be most accurate.
The reports in Xero provide great clues to help you improve your business performance and profits. Make a habit of reviewing them frequently; your business’s financial health will be better off each time you do.
The number and type of reports you can see in your Xero account will vary depending on your user role. If you’d like us to generate additional reports for you each month, please reach out, and we’ll be happy to help.