Why you need meaningful Cashflow and Budget reports

Why you need meaningful Cashflow and Budget reports (1)

Is the first thing that comes to mind, when you hear Cashflow and Budgets, an endless spreadsheet that is hard to read and it needs endless updates? Well, that is one way to do it but there are other ways that are less boring and less complex.

The end goal of a cashflow or budget report is to give you information on where the money went and/or where is it going. Both reports can be short term, three to six months, or long term and cover three to five years. Each of them would have different levels of accuracy and purpose.


The first step before building your report would be to decide the goal.

What do I want to get from this report?  The most common goals are:

  • Help understanding day to day commitments
  • Planning for potential shortages
  • Comparing your business with benchmarks and indicators
  • Planning for growth or expansion
  • Planning and assessing finance requirements


Once you have defined the goal of the report then find the right tool.

There are many options to build these reports out there. You can start by doing basic budgets and forecast with Xero, but if you are looking for something more complete, apps like Float, Castaway and Fluidly will give you a vast range of options to build something specific for your business.


Maintain it and understand it.

Now that you spent some time defining your goals and building your report, this is the most important step. There is no point in building a report if you do not understand how it works, and what you are looking at. Continue to update the numbers, change them around and consider different scenarios. For example, we have all been through Covid lockdowns and how are businesses affected by them, so what would a lockdown of three, six, or ten days would look like in your business? What are the key measures to act on? These are the sort of questions a budget and cashflow report can answer.

A report does not need to include all the detailed transactions happening in your business on a daily basis. It can be as simple as monthly estimates and the more you use it the more accurate it will get, even if it is predicted numbers. This is when you realise that you actually know your numbers and can accurately predict what will happen.

Understanding your numbers is the difference between a successful business and a failed business. If you need assistance in choosing or building reports that are meaningful for your business contact Link Advisors.