Learn how to create professional invoices in Xero Accounting. Discover...
JacRox are Xero Gold Partners
Experienced Chartered Accountants
Tips on How to Improve Your Cash Flow Management with Xero
Introduction: The Importance of Cash Flow Management for Small Businesses
Managing cash flow effectively is critical for the success of any small business. Inadequate cash flow management can lead to various issues, including the inability to pay bills or invest in growth opportunities. This article aims to guide small business owners on improving their cash flow using Xero, one of the UK’s leading accounting software platforms.
Cash Flow: What Is It and Why Does It Matter?
Cash flow refers to the amount of cash your business generates and spends over a specific period. Maintaining a healthy cash flow is essential for your business’s survival and growth. Let’s explore how Xero can help you keep your bank accounts happy and your business thriving.
The Power of Xero in Cash Flow Management
Dashboard: Your Cash Flow Hub
Xero provides a user-friendly dashboard to monitor your cash flow in real time. This feature helps you track your cash flow and manage your cash effectively.
Invoices: Get Paid Faster
One of the quickest ways to improve your cash flow is to get your invoices paid faster. Xero allows you to send invoices instantly and even adds an expected payment date to help manage cash flow better.
Short-term Cash Flow Projection: Plan Ahead
Xero offers a short-term cash flow projection feature that enables you to foresee your cash position in the next 7 or 30 days. This tool is invaluable in planning for any negative cash flow that may arise.
Xero Analytics Plus: Advanced Cash Flow Insights
For those who require in-depth analysis, Xero Analytics Plus provides a more detailed cash flow forecast, helping you manage and improve your cash flow even further.
Cash Flow Forecasts in Xero: A Game-Changer for Your Business
What is a Cash Flow Forecast?
A cash flow forecast estimates the amount of money you expect to flow in and out of your business within a specific period. It provides a detailed overview of your business’s cash flow, helping you anticipate periods of negative or positive cash flow. With this information, you can make informed decisions, such as when to invest in new equipment or cut back on expenses.
Xero’s Cash Flow Forecast Feature
Xero includes a cash flow forecast feature, making it easier to manage your cash flow effectively. This feature is part of Xero Analytics Plus, which offers an in-depth analysis of your business performance, including cash flow information.
Practical Tips to Track Your Cash Flow with Xero
Track Payment Dates
Xero allows you to add an expected payment date to your invoices. Knowing your planned payment dates helps you manage your cash flow effectively.
Speed Up Invoicing
The sooner you invoice, the sooner you get paid. Xero’s invoicing feature ensures you can send invoices immediately upon completing a job, thus improving your cash flow.
Utilise Online Payment Options
To get paid faster, enable online payment options through Xero. This feature reduces the time to pay and positively impacts your cash flow.
Get In Touch
For personalised advice directly relating to your business, it’s beneficial to consult professional advisors. Here at JacRox, our Xero specialists can guide you through the onboarding process, all the way through to crafting a bespoke package tailored to your business needs. Please fill out the contact form below, and one of our JacRox team will promptly be in touch.
Conclusion: Xero – Your Cash Flow Management Partner
If you still have questions about managing your cash flow, Xero Central offers numerous resources to help. Xero has several features to improve cash flow, from a straightforward dashboard to more advanced tools like Xero Analytics Plus. Using Xero, you can keep up with late payments and maintain a positive cash flow.
With Xero, you can get paid faster by sending invoices with payment links. Additionally, you can add Due Dates or Overdue reminders when an invoice is not paid on time, encouraging customers to pay their invoices quickly.
With Xero’s comprehensive suite of features, it can help you keep your cash flow under control. The Cash Flow Forecast template lets you predict upcoming payments and overdrafts or excesses to ensure enough cash is available for future payments. You also can track overdue invoices and bills within the platform. Hence, you know exactly where your business stands regarding what needs to be paid.
You must review your financials regularly to identify any potential issues with how much money is coming into or going out of the business. Ensure all overdue invoices are followed up on promptly, look out for trends in customer payment habits, and create a budget for regular and unexpected expenses so that you know what kind of impact these will have on your overall financial position.
We were instantly impressed with their approach to accountancy
Mark Moppet | Managing Director
JacRox is transformational, saving us hours a week in mundane tasks, making life easier.
Duncan Ogilvie | Managing Director
On every occasion we’ve sent an enquiry they’ve been straight back to us with an answer
Paul Mulderrig | Managing Director
Xero businesses we’ve helped achieve great things