What is a cashflow statement?

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Do you really know what a cashflow statement is?

Now that we’re into another year, surely you owe it to yourself to review your plans so you make this year as profitable as possible and better than last year!

It’s really important that you know what your turnover needs to be, to deliver on your profit targets. So you get to live the life you want and deserve for all your hard work running your business. What better way than ensuring you plan your cashflow and then monitor actuals against it!

Equally, if not more important is forecasting your cashflow so you know in advance if there are any issues and can put in place measures to combat.

Once you have planned it all out, you need to monitor the actuals against these forecasts.

In this week’s video David explains more about your cashflow statement.

In this video David goes through what a cashflow is and why it’s so important for you and your business.

Cashflow forecasting is so important for any growing business. It’s a well known fact that many successful businesses fail due to overtrading as they grow and running out of cash.

Therefore it is imperative that you can plan when you need to obtain additional funds to support your growth. It’s always easier to obtain in advance rather than to do when under duress!

It’s really important, once you have your forecast you compare your actuals against it. This gives you an early alert if something is not quite right and you need to take “corrective action”.

One of the services we offer at Krystal Clear Accounting, is producing cashflow forecasts. We also offer Profit & Loss forecasts, budgets and full business models that show what is possible!

If you’d like help with Forecasting and increasing your profits then drop us an email at [email protected] or give us a call on 0161 410 0020.

After all, “Not all accountants are the same!”

Disclaimer

It is important that you take professional advice before making any decisions based on the information that you learnt here. While every effort has been made to make sure it is accurate it cannot be precisely tailored to your personal circumstances. This article is for general information only and no action should be taken, or refrained from, as a result of this information. Professional advice should be taken based on specific circumstances in each individual case. Whilst we endeavour to ensure that the information contained in the article is correct, no liability will be accepted by Krystal Clear Accounting which is a trading name of Kim Marlor Associates Ltd or damages of any kind arising from the contents of this communication, or for any action, inaction or decision taken as a result of using any such information.

What are Bank Feeds and how do they work?

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In short, bank feeds create a digital link between your business bank account and your accounting software, such as Xero or QuickBooks.

This means bank transactions are automatically downloaded into the accounting software. This simple piece of automation, completely removes the need to manually input every bank receipt and payment into the accounting software.

Having bank feeds in place, saves a HUGE amount of time bookkeeping. That’s because it completely removes the need to manually input bank transactions into the accounting software.

Saving time bookkeeping isn’t the only benefit for the business….

What are the main benefits to a business using bank feeds?

Bank feeds automate, what was previously, a time-consuming task of entering all the bank transactions into the accounting software.

This saves the business a HUGE amount of time (& money) spent on bookkeeping.

With bank transactions being downloaded from the bank every day, it means it’s quicker and easier to keep the bank balance in the accounting software up-to date.

With the accounting software up-to date, the bank is updated daily which gives you a clearer, real-time view of your business’s cash flow.

This makes it easier for you to plan your cashflow, and take action to improve it.

There is always the risk of errors being made when data is being manually inputted into the accounting system. It is often time-consuming to find and correct any errors. Also, if an error is large then the Profit & loss and Balance Sheet reports will be inaccurate and potentially misleading.

Automating the bank transaction entry previously manual process, reduces the risk of errors being made and ensures that the bookkeeping records and reports are accurate.

How to Link Your Bank to Xero

Ensure that your bank account is set up for online banking. This feature is typically available from all major banks.

Log into your Xero account and navigate to the banking section. Select ‘Add Bank Account’ and follow the prompts to search for your bank.

After adding your bank account details, you’ll see an option to set up bank feeds. Click ‘Agree’ to the terms, then securely log into your online banking portal through Xero to authorize the connection.

Are Bank Feeds Safe & Secure?

Yes.

Firstly, having bank feeds in place ONLY means bank transactions are downloaded into the accounting system. They do NOT give anyone else access to the business bank account.

Secondly, XERO has various security measures in place to give you a piece of mind that your financial data is safe and secure:

Encrypted Connections: Xero uses advanced encryption technology to secure the data transmission from your bank to Xero. This means your sensitive information is encrypted during transit and cannot be intercepted or read by unauthorized parties.

Compliance and Standards: Xero adheres to high standards of data security compliance, thus ensuring that its practices meet or exceed industry security standards and regulations.

Regular Renewals: To maintain a high level of security, XERO requires that the bank feed connection is renewed every 90 days. This process is straightforward and helps ensure that the integrity of your financial data is always protected.

In Summary

In short, having bank feeds really saves businesses time and money on their bookkeeping.

They automate and eliminate what is otherwise a time consuming and error prone manual process.

Bank feeds is just one of the ways technology can be used to help business owners improve the financial side of their business.

What is a cashflow statement?