Cash flow chart: which chart to use, with a 12-month example
How to make a cash flow chart for a small business: cash in vs out, closing balance, waterfall and flow diagram, a 12-month worked example and Xero steps.
Updated 26 October 2026
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Short answer: a cash flow chart shows money coming into and going out of the business over time. Two charts answer most owners’ questions. The first is a column chart of cash in against cash out for each month, which shows the months that cost you money. The second is a line chart of the closing bank balance at the end of each month, which shows how low the balance gets. Make them from 12 months of bank figures (Xero’s Bank Summary run by month gives you all three numbers), put them in a spreadsheet, and look for the low point. That low point, not the year’s total, decides whether you can afford a purchase, a hire or a slow-paying customer. A waterfall chart then shows where the year’s money went, and a flow diagram maps where the money comes from and who spends it.
The four kinds of cash flow chart
| Chart | What it shows | The question it answers |
|---|---|---|
| Column chart: cash in vs cash out by month | Two bars a month, money received and money paid | Which months cost me money, and is it the same months every year? |
| Line chart: closing balance by month | The bank balance at each month end | How low does the balance get, and when? |
| Waterfall (bridge) chart | Opening balance, then each kind of payment taken off, ending at the closing balance | Where did this year’s money go? |
| Flow diagram (Sankey or boxes) | Each source of money flowing into each kind of spending | What does the business do with its money? |
The first two need only three numbers per month, so they take a few minutes. The waterfall needs cash out split by type. The flow diagram is more of a one-off picture for a plan or a board meeting than something to update monthly.
A worked example: a pool maintenance business in Perth
These figures are made up. Daniel runs a pool cleaning and repair business in Perth with four staff. Summer is busy and winter is quiet. Bank figures include GST, as bank figures do. He had $30,000 in the bank on 1 July 2025.
| Month | Cash in ($) | Cash out ($) | Net ($) | Closing balance ($) | Closing balance (each █ = $5,000) |
|---|---|---|---|---|---|
| Jul 2025 | 38,000 | 44,000 | −6,000 | 24,000 | █████ |
| Aug | 36,000 | 41,000 | −5,000 | 19,000 | ████ |
| Sep | 45,000 | 42,000 | +3,000 | 22,000 | ████ |
| Oct | 56,000 | 49,000 | +7,000 | 29,000 | ██████ |
| Nov | 64,000 | 50,000 | +14,000 | 43,000 | █████████ |
| Dec | 70,000 | 55,000 | +15,000 | 58,000 | ████████████ |
| Jan 2026 | 72,000 | 54,000 | +18,000 | 76,000 | ███████████████ |
| Feb | 68,000 | 60,000 | +8,000 | 84,000 | █████████████████ |
| Mar | 60,000 | 52,000 | +8,000 | 92,000 | ██████████████████ |
| Apr | 48,000 | 66,000 | −18,000 | 74,000 | ███████████████ |
| May | 40,000 | 46,000 | −6,000 | 68,000 | ██████████████ |
| Jun | 37,000 | 52,000 | −15,000 | 53,000 | ███████████ |
| Year | 634,000 | 611,000 | +23,000 | 53,000 |
The last column is the line chart drawn sideways. Check the table adds up: 30,000 opening + 634,000 in − 611,000 out = 53,000 closing.
What the two charts say
- Cash in vs cash out: cash out was bigger than cash in for five months (July, August, April, May and June), every one of them in the cool season. Summer pays for winter. April is the worst single month at −18,000, because a quarterly BAS payment and the annual vehicle insurance landed in the same month as the first quiet weeks.
- Closing balance: the year ended $23,000 up, but the balance fell to $19,000 in August. Daniel spends about $41,000 in a quiet month, so that was about two weeks of payments in the bank. The March peak of $92,000 looked like spare money, and most of it was needed to get through the next winter.
The decision it changes
In June 2026 Daniel wants a new ute for $45,000, paid in cash in July. The year’s total says he can: he finished $23,000 up with $53,000 in the bank. The line chart says otherwise. If next winter looks like this one, the balance goes 53,000 − 45,000 = 8,000 at the start of July, then −6,000 in July leaves 2,000, and August’s −5,000 takes the account about $3,000 overdrawn, with wages still to pay. Paying for the ute in January instead, after the busiest weeks, leaves the low point at about $42,000 in August (53,000 − 6,000 − 5,000), and January ends at about 54,000 after the purchase. The cash runway calculator does the same test on your own figures, and how many months of cash should a business have covers how big the cushion should be.
The waterfall: where the year’s money went
| Step | $ | Running balance ($) |
|---|---|---|
| Opening balance, 1 July 2025 | 30,000 | 30,000 |
| Received from customers (and GST collected) | +634,000 | 664,000 |
| Wages and super | −252,000 | 412,000 |
| Chemicals, parts and equipment | −148,000 | 264,000 |
| Vehicles and fuel | −61,000 | 203,000 |
| GST paid to the ATO (BAS) | −46,000 | 157,000 |
| Rent, insurance and other overheads | −44,000 | 113,000 |
| Daniel’s drawings | −60,000 | 53,000 |
| Closing balance, 30 June 2026 | 53,000 |
As a waterfall chart, each row is a bar that starts where the last one ended. Wages and chemicals are the two tall bars, which is where any saving would have to come from. GST is not a cost of the business, but it is real cash out, so it belongs in a cash chart even though it never appears in the Profit and Loss.
How to make a cash flow chart from Xero
- Get the monthly figures. In Xero, run Accounting › Reports › Bank Summary for each month of the last 12 (or compare periods by month if your version offers it). It gives the opening balance, cash received, cash spent and closing balance for each bank account. Add the accounts together if you have more than one, but leave out a savings account you keep for tax if you treat it as untouchable.
- Split cash out by type (for the waterfall). Run Cash Summary for the year. It groups payments by account (wages, each expense, GST or VAT, loans, drawings); how to read the Cash Summary explains each section.
- Export and chart. Export to Excel or Google Sheets. Select the month, cash in and cash out columns and insert a clustered column chart. Select the month and closing balance columns and insert a line chart. Excel (2016 or later) and Google Sheets both have a waterfall chart type for the bridge.
- Mark the low point and the months below zero net. Those are the figures to plan around.
Xero’s dashboard (homepage) already has a cash in and out chart, but it covers only the last six months, so it cannot show a full season or compare with last year; see the Xero dashboard explained. For the weeks ahead rather than the months behind, Xero’s short-term cash flow projects 30 days from bills and invoices already entered (Xero short-term cash flow). Menu names move between Xero releases and regions, so search Xero Central for the report name if your screen differs. All of these read bank transactions in Xero, so reconcile first.
Charting the future: a cash flow forecast chart
The same two charts work for the next 12 months. Put your expected cash in and cash out in the same columns, start from today’s balance, and chart the forecast closing balance as a line. If last year’s pattern holds, the chart shows the low point before you reach it. The free cash flow forecast template builds the table, and the cash flow forecast example walks through one month by month. Draw last year’s actual balance and this year’s forecast on the same line chart: where the forecast sits well below last year, find out why before it happens. For one project (a new site, a vehicle, a contract), chart its cumulative cash flow instead: the low point of the running total is the money you need, and the month it crosses zero is payback.
Common mistakes
- Charting profit instead of cash. The Profit and Loss by month is a profit chart. It leaves out GST, loan repayments, equipment bought and drawings, and counts invoices before they are paid.
- Only charting the year’s total. A year that ends up can still go overdrawn in the middle. The low point is the number to plan around.
- Charting six months. Six months of a seasonal business shows half a pattern. Use 12, or 24 to compare the same months.
- Mixing in transfers. A transfer from savings to the cheque account is not cash in. Leave transfers between your own accounts out, or chart all accounts added together.
- Unreconciled months. If the bank feed has unreconciled lines, the chart is wrong for those months. Reconcile first (why your Xero bank balance does not match).
Common questions
What is a cash flow chart? A cash flow chart is a picture of the money coming into and going out of a business over time. The most useful versions are a column chart of cash in against cash out for each month and a line chart of the closing bank balance at each month end.
How do I make a cash flow chart? List each month with its cash in, cash out and closing bank balance, which Xero’s Bank Summary report gives you month by month. Put the figures in Excel or Google Sheets, then insert a clustered column chart for cash in and cash out and a line chart for the closing balance.
What type of chart is best for cash flow? A column chart for cash in against cash out, because it shows which months cost money, and a line chart for the closing balance, because it shows how low the balance gets. Use a waterfall chart to show where a year’s money went.
What is a cash flow waterfall chart? A waterfall, or bridge, chart starts with the opening bank balance, adds cash received, then takes off each kind of payment as a separate bar, ending at the closing balance. It shows at a glance which payments took the most money.
What is the difference between a cash flow chart and a cash flow statement? A cash flow statement is a report that sorts a period’s cash movements into operating, investing and financing activities. A cash flow chart is a picture of cash over time, usually month by month. You can chart the figures from a cash flow statement, but most owners chart bank figures.
Can Xero show a cash flow chart? Yes, the Xero dashboard has a cash in and out chart, but only for the last six months. For 12 months or more, run the Bank Summary report by month, export it, and chart it in Excel or Google Sheets.
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