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Business advice for a new financial year

Another new financial year already!

It has gone quickly so we outline our top tips for business owners starting a new financial year and planning ahead.

Four months ago business owners weren’t necessarily comprehending the full impact of COVID-19 but the reality is that it’s really important to make sure you’ve got a plan in place and that you understand where what your goals and targets are, and how you’re going to get there.

Our advice is to simply start from the top – the 30,000 feet above sea-level view – and ask what your goals are for next 3-10 years:

  • What does that look like?
  • What do you want to achieve from a business point of view?
  • More importantly, where do you want to be from a personal point of view, and
  • How does your business deal fit into all of that?

Then break down your goals into smaller targets. Some business owners use the term ‘chunk’ to describe breaking their goals into smaller steps.

We also encourage you to take a step back and consider doing some market analysis

Understand what is going:

  • Do you know what your customers want now?
  • What will they want next, moving forward?
  • What worked well during COVID-19 lockdown?
  • Will you achieve your goals potentially faster with a new business model?

Define your actions and those smaller goals and then set in place what you to achieve them. Write each down with individual action items and then understand the time frames around as well as what is involved from a resource point of view.

Once you have your initial plan drafted, also consider the financial implications of your proposed actions. Look at your Profit & Loss, understand cash flow and determine if your plans are achievable from financial perspective. Ask yourself what the impact financially is with respect to your action items, then repeat the process until you’re comfortable that you have a plan in place that feels like it is a stretch, but is achievable. Then you can track and monitor performance against it.

With financial business modelling and forecasting, you need to understand what’s the best use of your time. Is it something you can confidently do yourself, or should you be asking your financial partners like Notch Above Bookkeeping or your accountants to do that?

Also keep your longer-term strategy in the back of your mind as you’re ticking off each chunky action item. In reality if you look at Mike Tyson’s trainer, he says everyone has got a plan to get punched in the face, so you have got to be nimble and flexible enough to be able to move quickly if required.

It rings true for business. You never know when something will get thrown at you and COVID-19 was the perfect example of that.

Prefer to watch this topic in video format? Click below or browse all of our video topics here.

Notch Above Bookkeeping is a team of Platinum Certified Xero bookkeepers and BAS Agents. Based in Brisbane we help small business clients right across Australia prepare their BAS returns and streamline their bookkeeping processes, payroll and accounting records. Call us to find out how on 1300 015 130 today.

Copyright 2020. @NotchAboveBAS and @SalisburyAccts

cash flow

COVID-19 Cash Flow Boost

Boosting Cash Flow for Employers

Cash Flow Boost not to be offset against existing tax debt in some situations.

The Tax Office has announced that the cash flow boosts will be applied to reduce liabilities arising from the same activity statement but will not be offset against existing BAS debt but rather refunded to you. 

This is great news for businesses that do have an existing debt and will mean that the cash is in the hands of the business to assist during this uncertain time.

For this to happen, however, we do need to ensure the BAS for the March quarter is lodged AFTER 28 April rather than before.  If lodged before the refund will be offset against existing debt first.

For more information on the cash flow boost initiative, please see the tax office website here or get in touch with the team at Notch Above Bookkeeping on 1300 015 130.

Back to more coronavirus updates
Source: Boosting cash flow for employers (2020). Available at: https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/?anchor=Accessingthecashflowboosts#Accessingthecashflowboosts (Accessed: 20 April 2020).

Economic Stimulus Package

Coronavirus Economic Stimulus Package

The Government has announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the economy as the world deals with the significant challenges posed by the spread of the coronavirus.

The targeted stimulus package is focused on keeping Australians in jobs and helping small and medium-sized businesses to stay in business.

The package has four parts:

  1. Supporting business investment
  2. Providing cash flow assistance to help small and medium-sized business to stay in business and keep their employees in jobs
  3. Targeted support for the most severely affected sectors, regions and communities
  4. Household stimulus payments that will benefit the wider economy

Delivering support for business investment

  • $700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.
  • $3.2 billion to back business investment by providing a time-limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.

These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or 3 in every 4 workers. The measures are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the short term.

Cash flow assistance for businesses

  • $6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax-free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
  • $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

Stimulus payments to households to support growth

  • $4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession cardholders. Around half of those that will benefit are pensioners. The payment will be tax-free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.

Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

Assistance for severely-affected regions

  • $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.

The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the bushfires for taxpayers affected by the coronavirus, on a case-by-case basis. In addition, the ATO will consider ways to enhance its presence in other significantly affected regions to make it easier for people to apply for relief, including considering further temporary shop fronts and face-to-face options.

The Government’s economic support package is proportionate, timely and scalable to respond to the economic challenges presented by the spread of the coronavirus.

Source: Economic Stimulus Package | Treasury Ministers (2020). Available at: https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/economic-stimulus-package (Accessed: 13 March 2020).
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The human cost of late payments

Late payments affect business from financial and operational perspective

It’s an issue that’s close to our hearts and a conversation that matters.

But another conversation, one that’s often lost amid all the talk about lost revenues, invoice-chasing and the rest is the human cost of late payments. Because when businesses aren’t paid on time, it doesn’t just affect the bottom line – it affects people.

Xero teamed up with PayPal to find out more about how late payments affect, not just businesses but their owners too. 500 small and medium business (SMB) owners shared how they dealt with this ongoing issue.

Here are the key findings:

Impact on personal finances 

Businesses are comprised of people – and people need to be paid on time if they’re going to avoid stress and enjoy their work. It goes for entrepreneurs just as much as employees.

Overall, 35% of SMB owners claimed late payments meant an increased risk of debt – and 52% said they’d used their own money, or that of their friends and family, just to keep going.

Late payments can stop entrepreneurs from tending to relationships and their wellbeing. If you’re not getting paid on time, you might not be at your best.

So, it’s no surprise that 73% feel much more optimistic about their business when they have positive cash flow. The more reliable and regular your income, the better!

Impact on personal wellbeing 

Running a business is an act of love, but it can also place a strain on entrepreneurs – particularly if they don’t know when the money they’re owed is coming in. Late payments can affect:

  • Mental health. More than two-fifths of SMB owners claim that late payments have affected their mental health.
  • Sleep. 43% say they’ve been kept up worrying about their business’ cash flow.
  • Self-esteem. Some 45% of business owners feel they’ve failed their companies when they’re cash flow negative.
  • Outlook and optimism. Overall, 37% of entrepreneurs have considered giving up the ghost because of cash flow issues.

We don’t want small and medium business owners to give up. They’re essential to the economy – they make up 99.9% of registered businesses, after all.

Making late payments history

What if late payments were no longer an issue? What if every entrepreneur was paid on time and in full? The survey found it would make a real difference to finances, wellbeing, and overall attitude. When asked, business owners said:

  • It would make running the business feel ‘worth it’. Over three-quarters of entrepreneurs (76%) think being paid on time would make the work more rewarding.
  • They’d feel more optimistic about their businesses. 73% claim it would make them more hopeful about their prospects.
  • They’d enjoy better health. 26% say they’d have better physical fitness, and 21% say they’d spend more time on interests and hobbies.

Happier, healthier business owners

Small business owners have enough on their plates. Running a business is hard enough as it is, without losing sleep over a late invoice.

There are things entrepreneurs can do to minimise these issues and bring more positivity into the workplace. Automated accounting tools make managing invoices simple and straightforward.

But, beyond that, we’d encourage everyone across all links of a supply chain to pay their invoices promptly and without fuss. It’s not just the business that’s affected: it’s the people who work for it. Everyone benefits when everyone is paid on time. Let’s make late payments history.

Notch Above Bookkeeping are Xero Platinum bookkeepers and BAS Agents. Get in touch on 1300 015 130 to speak to one of our Xero certified advisors about how to get the most out of Xero for your business.

Source: Xero

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Got cash for Christmas?

It would be nice if you could send an invoice, then sit back and watch the money roll in.

But half of all invoices are paid late. And some aren’t paid at all.

So how do you handle outstanding invoices so you can be sure to have cash for Christmas?

How to collect money

Some people – like credit control managers, accountants and debt collectors – make a living out of getting invoices paid. Their methods aren’t rocket science. Just a mix of persistence and courage. If you’ve got outstanding invoices, try their techniques on how to collect money (and many experts recommend starting at number 4, by the way).

1. Write a payment request letter or email

This is your first move when someone is late paying an invoice, so there’s no need to overthink it. Open your note with a polite greeting, quote the invoice number, say when it was due, and ask when you can expect payment. There’s no need to explain what the invoice was for. The details should be on the invoice itself. Keep the letter or email really short.

2. Send an overdue invoice

You could send an overdue invoice, which is really just the original invoice with an ‘overdue’ stamp on it. Or you could simply re-attach the original invoice to your payment request email, with or without the overdue stamp.

3. What is a statement of accounts, and when should you send one?

A statement of accounts shows all the outstanding invoices a particular customer has with you. If someone has a few, by all means summarise them into one document or use your accounts software to generate a statement. But don’t expect it to hurry them up unless you follow with a phone call.

4. Make the dreaded phone call

Businesses that chase late payers by phone tend to get the best results. Customers can always screen your call but, once you have them on the line, it’s hard for them to ignore you. Don’t say too much. They’re the ones who need to do the talking. Just identify what’s overdue, ask when it will be paid, then wait in silence. Don’t get off the phone till they’ve told you when payment will arrive.

5. Charge a late payment fee on your invoices

You can demand more money if payment is late, but you can’t do it out of the blue. You need a late-fee policy and it must be clearly communicated up front in your payment terms. This is a great reason to get an agreement signed before supplying anything.

Identify late fees on the invoice, too. Don’t make it complicated. Some businesses quote it as a percentage but you’re better off to do the maths for your customer. Say something like:

  • Total due by 1 June: $100
  • Total due after 1 June: $110

Write (or call) to tell a customer when they’ve entered late fee territory. You could even offer to waive the fee if the customer pays right away.

6. Cut them off until outstanding invoices are paid

Why would you keep providing goods or services that you’re not getting paid for? It’s unsustainable. If a customer stops paying, stop filling their orders. And tell them what bills need to be paid before you’ll start supplying them again.

This is an aggressive move and some customers will take offence. You need to be prepared to lose the business to do this.

7. Hire a debt collector to go after your overdue invoice

Debt collectors have a skill for getting overdue invoices paid. It should cost nothing to put them on a case, but they’ll take 25% or more of the money they collect. This is likely to bring an end to your relationship with the customer so make sure you’ve exhausted all your other options.

8. Call in the lawyers

If the debt collectors don’t make any progress, then you could go all the way and hire a lawyer. The specific legal action will depend on the type of organisation you’re dealing with. It’s different for sole traders, partnerships and companies. In other words, it can get complex – so use a specialist lawyer. Your debt collector might have in-house legal expertise, or they may introduce you to a lawyer.

If your outstanding invoice stays unpaid

You have a lot of levers for getting paid, but sometimes none of them work. You may get stuck with an unpaid invoice. If that happens, you should write it off so your accounts reflect the lost income. That’s especially important if you’ve already paid tax on the income that was expected. The act of writing it off allows you to claim the tax back.

To reduce your chance of getting caught with an unpaid invoice in the future, consider doing credit checks on prospective customers before agreeing to work with them.

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns. Call us BEFORE Christmas on 1300 015 130.

Thanks to Xero for allowing us to share this article with you.
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How to Give More This Christmas By Spending Less

As a business owner, Christmas is the perfect time to give back to your clients, customers and employees.

However, sometimes I have to play devil’s advocate with my clients when it comes to their Christmas shopping sprees.

As a bookkeeper, it’s my duty to rein in my clients’ spending so their books are balanced at the end of the year.

It’s not much fun telling people they have a limit on their Christmas budget, but it must be done for their business to stay healthy.

I’ve seen too many business owners go overboard when spending for Christmas that they run into trouble when the new year arrives. I think it’s fine to splurge occasionally, especially if that person truly deserves it, but it shouldn’t be a regular thing every year.

Furthermore, gifts may not be as emotionally satisfying as you think they are. This well-cited study shows that most people feel happier spending money on experiences compared to buying things.

The memories made and the time spent far outlast any giddiness you feel when opening a present, which tends to dissipate after you get used to the gift. As an alternative, treat your loved ones and employees to a new experience or offer help instead of buying expensive gifts.

In preparation for the festive season, this is my list of tips to help you plan a Christmas gift list that won’t burn a hole in your pocket or disrupt your business plans.

  1. Set a budget

And stick to it. Never go above what you can afford to spend because you will be paying for it when times get tough. You can get your bookkeeper to draft a realistic budget or they can check your accounts to see if your budget makes sense for your business. Record your budget and expenses somewhere, preferably in your accounting software.

Obviously, if you’ve made better profit this year, then you can increase the budget to treat your hardworking partners, employees and family members who have tirelessly supported you. If you’re at the losing end, then opt for something low key or do something nice for them instead.

  1. Make a list

Don’t just make a list. Put the estimated price for each item. Tally them up and see whether you can afford them. If the bill is too big, find cheaper alternatives or pay them a favour instead. Most people appreciate the thought rather than the gift itself.

  1. Get creative with gifts

As mentioned above, experience trumps material things. Start crafting up creative ideas for your loved ones. Your spouse may appreciate a delightful dining experience at a highly rated restaurant than a new phone. Your employees may appreciate extra time off from work instead of a big year-end soiree.

Try offering help when needed. Helping a busy friend attend an acclaimed musical while you babysit their kids may be more welcomed than a nice trinket for Christmas.

  1. Use your credit card wisely

It’s so tempting to swipe, swipe and swipe your credit cards for Christmas. After all, you can worry about the bill after you’re back at work… next year! I always advise my clients to pay in full every month because credit card rates are high – up to 24% a year.

You may swipe your card to earn points, which you can redeem, but always pay in full or as much as you can every month. Change your spending limit if necessary, so you will never owe more than what you can afford to pay.

  1. Scour for a bargain

You should research prices ahead of time, so you can buy the items when they go on sale. Don’t shop at the last minute because you will be paying through your nose. Make a list, and tackle them one by one. If you spend some time, you will find plenty of bargains and online coupons for that gift or experience you have been eyeing.

  1. Personalise your gifts

If you have time, try to make each gift personal. It could be as simple as a handwritten card, or spending an extra hour with your dad at the golf course to listen to his problems. Nothing spells unforgettable than the effort and care you show.

These are just a few tips for Christmas shopping. Always remember you still have a business to run after the holiday ends. If you need to treat yourself at the end of year, do it wisely without breaking the bank. Take less than what you need to ensure you have enough for rainy days.

We are more than happy to speak to you if you need bookkeepers who will keep your finances in check. Have fun shopping!

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Article written by Jac Gallagher. Read more about Jac’s approach to business bookkeeping and how she can help boost your personal productivity here or call Jac at Notch Above Bookkeeping on 1300 015 130 today.
Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support.  Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

Are you on track with your business goals?

As we come to the tail end of winter – hurrah! – some of us may be coming out of hibernation or still lost in the monotony of day-to-day tasks in business.

I don’t blame you, especially since we haven’t had a long weekend in a while. Well, I’m here to give you a wake-up call so you can embrace the coming spring season with confidence. August is usually a period when I need to give my clients a much-needed motivational boost to stay on course with their business targets.

Do you have a set of business goals?

First, are you monitoring critical KPIs such as business costs, profitability, sales, cashflow health and your budget?

If you’re not, you need to start doing so as soon as possible. Get in touch with your bookkeeper and accountant to start drafting a realistic set of business goals. One of the things I love about Xero is the ‘Dashboard’ because it gives an eagle’s eye view of my business.

The Xero Dashboard is fully customisable so you can set what you would like to track based on your current goals, such as reducing business costs or increasing the profit margin.

Here are just a handful of KPIs that Xero can track:

  • Cash flow to monitor your inflow and outflow of cash to see whether you are ahead of your plans or facing a potential crisis.
  • Money you owe and owed to you
  • Your budget and how much you have spent
  • Profit margin and current liability

Are you achieving your business goals? (Breaking down your goals to projects)

Business goals can be overwhelming if you don’t break them down into several projects or areas of improvements. Projects can then be broken down to tasks or actions. Doing this will prevent you from feeling overwhelmed or unmotivated to start kicking your goals.

One of the most common issues faced by my clients is they tend to get lost in their everyday tasks. When you’re constantly looking at a list of things to do every single day, you will start to feel like a hamster running on a spinning wheel. It never ends, and soon you will lose any motivation to run your business.

Understand the difference between everyday tasks that must be done to run the business and comply with the law, and tasks that help achieve your targets. The latter will grow your business in the long run so you must set aside time for it or outsource tasks to subject matter experts. You can’t do it all.

If you don’t keep your eye on the prize, you’ll start to get upset and anxious over little setbacks, which are part and parcel of business. You will be working long hours without making more income or sales. You will burn out faster than you anyone else.

If you already have goals in place, it’s crucial to monitor and fix any issues as they arise. This is where you need to work closely with your bookkeeper to track the numbers. If you’re in need of some motivation, look at what you’ve achieved so far and have a little celebration with your staff.  Learn from any mistakes and regroup with your team.

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What if you’re falling behind with your business goals

Get in touch with your bookkeeper or accountant quickly. As the subject matter experts for business operating numbers, I can’t tell you how many times I have caught something before it became a major problem for my clients. In fact, a good bookkeeper will raise alarm bells before you speak to them. We produce monthly reports and schedule catch-ups with our clients so nothing goes unnoticed.

Anything can happen in business. The economy may shrink, which affects consumer spending, regulations may change or tax benefits may be cut. You need to stay one step ahead by regularly monitoring your goals and revising your plans as needed.

Get your team members to commit to resolving any issues that is hindering you from reaching your goals. Draft a plan of attack and work together to tackle it as a team. Establish a standard of accountability among team members. This is not to punish them when something goes wrong, but for your business to thrive by tackling problems head on.

At the very least, talk to your bookkeeper who can help set goals, assist you in deciphering the numbers and guiding you to stay on the right course towards your targets. It is never too late to start new goals or to fix any issues. This way, you know you truly deserve that long break over Christmas and the New Year.

 

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS
Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Abov
e can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations,
supplier payments, payroll services, debtor control and BAS returns.
 
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5 Quick Tips for Faster Customer Payments

  1.  Agree amounts upfront
  2.  Invoice immediately
  3.  Multiple payment options
  4.  Send reminders
  5.  Call in the debt collectors

According to ASIC, 40% of insolvencies are a direct result of inadequate cashflow.

Cashflow is the core of your business. Without cash your business will end up having to close the doors.

With these 5 Quick Tips, you’ll have your customers paying as soon as possible and you’ll stay in business.

  • Agree amounts and payment dates in advance of starting any work for your customers. Put an engagement letter or quote acceptance process in place. That way there are no nasty surprise bills. Your customer can approve the invoice through their accounting system immediately and get it paid by due date.
  • Invoice as soon as possible after the job is completed or in advance where possible. Better still, set up automatic recurring invoices in your accounting system if it is possible to invoice your customers this way. By doing this they get the invoices as soon as possible and their approval process can start immediately. Call us today if you are unsure how to prepare recurring, automatic invoices.
  • Ensure the payment options are displayed clearly on the invoices and include as many payment methods as possible. Make it easy for your customers to pay and be sure to include an online link which enables customers to pay via a credit card from their mobile device if that makes it easier for them. If you are not sure how to do this call our office today and we can help you.
  • Remind your customers a few days before the invoice is due and then again at periodic intervals after it is overdue. That way your customers know you are aware they have not paid and will not let it slip by. Some customers love the pre-reminder and it puts your invoice at the top of their mind. Your accounting system can automate this process.
  • Once 2 or 3 reminders have gone out pick up the phone and talk politely but firmly to your customers. You are not in the business to fund their business and if they persist in not paying or paying late you need to consider if it is time to send them to a debt collector and if you wish to keep them on as clients.

If you follow these quick and easy to implement tips you will see your cashflow increase. Call our office today on 1300 015 130 to find out how we can help improve your financials. Know of anyone who would benefit from this? Feel free to share.

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

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Statement of cashflow

For small businesses a healthy cashflow is crucial. That’s why the statement of cash flows report is so useful.

It shows you the money…where it came from, and where it went.

While the Profit & Loss (or Income Statement) can tell you if you’ve made a profit it may include income and expenditure that hasn’t been paid yet, or that isn’t in the form of cash, like deprecation.

The statement of cashflows only looks at cash and groups the money going in and going out into useful categories so you can better understand the health of your cashflow.

Here’s how the report works. It’s grouped into three main areas.

Operating activities – which is the cash that comes in and goes out as the result of doing business. Like customer receipts, supplier payments and wages.

Investing Activities includes the purchase of assets like office equipment. Or money received from the sale of assets, or any other investments the business has made.

Financing Activities shows loan repayments, or loans you’ve received from a lender. It also includes any money put in or taken out by the owners.

Use the report settings to compare periods so you can see how money coming in and going out is tracking month by month.

If cash is on the up maybe now is the time to make an investment or purchase that new company vehicle.

The report helps you make decisions about how to use your cash and what areas to focus on to improve.

You can customize the report to get a more detailed breakdown and create new groups within these main sections on the report.

You’ll see there’s already some useful groups there that you can move accounts into.

For example, if you have an interest income account that’s currently grouped with your sales income, you could move that account to be grouped with ‘Interest Received’. Simply drag ……… and drop. You’ll now have a new Interest received line on the report under operating activities.

You can also split the debits and credits of an account and move them to different places.

This is useful for things like a loan. You can split the debits and credits on a loan account so you can see loan repayments and loans received on separate lines on the report for more visibility.

Select the loan account and scroll to the top to split the debit and credit. Now move the credit into ‘Proceeds from long-term loans’ which is the money you’ve received from the lender. Then move the debit into ‘Repayment of long term loans’.

Now you’ll have two separate lines on the report so you can clearly see when you receive a loan and when you repay it.

Once you’re happy with the how the report is organised, save the template so you can use it again.

This report involves organising your chart of accounts to display the information accurately and effectively.

We highly recommend speaking to your adviser who can help you customize and use this report to improve cashflow.

If you don’t have an advisor you can find a certified Xero advisor in your area by visiting xero.com/advisors.