Xero reports: the six an owner needs, and how to save custom reports

Short answer: Xero has dozens of reports, but an owner needs six, run in this order once the bank is reconciled: the Profit and Loss (did we make money?), the Balance Sheet (where did the money go?), the Aged Receivables Summary (who owes us?), the Aged Payables Summary (what do we owe?), the short-term cash flow projection (what will be in the bank in 30 days?) and the Bank Reconciliation Summary (can I trust the rest?). Find them under Accounting > Reports (Reporting in the newer menu), star them as favourites so they sit at the top, and use Edit layout then Save as to keep a version with your comparison columns and extra rows as a custom report, so next month is one click. Fifteen minutes a month with these six answers most of what owners worry about.

The six reports and the question each answers

Report	The question it answers	How often	Read more
Profit and Loss	Did we make money, and is the margin holding?	Monthly, with last month and last year beside it	How to read it
Balance Sheet	Where did the money go? What do we own and owe?	Monthly	How to read it
Aged Receivables Summary	Who owes us, and how late are they?	Weekly	Who owes me money?
Aged Payables Summary	What do we owe suppliers, and when?	Weekly	Aged debtors and creditors
Short-term cash flow	What will be in the bank in 7 or 30 days?	Weekly	Short-term cash flow
Bank Reconciliation Summary	Does Xero’s bank balance match the statement?	Before reading any of the others	How to read it, and when it does not match

Useful once you have the habit: the Profit and Loss by month for a 12-month trend, the sales reports for sales by customer and by item, Budget Variance if you set a budget, the Statement of Cash Flows for where cash went over a quarter, the Executive Summary for ratios, and the Trial Balance at year end. Report names and menus change between Xero versions and regions, so if one is not where this guide says, use the search box on the reports page.

A worked month: profit 7,700, cash down 9,200

A Wellington landscaping company runs the six reports on 3 November for October (NZ dollars):

1. Bank Reconciliation Summary. Xero’s balance agrees with the statement at 21,300, so the other reports can be trusted.
2. Profit and Loss, October with September beside it. Sales 64,000, cost of sales (plants, materials, subcontractors) 38,400, so gross profit is 25,600, a margin of 40.0%. September’s margin was 44%. Four points on 64,000 of sales is 2,560 of profit lost in a month: the nursery’s prices rose in October and the quotes did not. Overheads 17,900, so net profit is 7,700.
3. Balance Sheet, 31 October with 30 September beside it. The bank fell from 30,500 to 21,300, so cash went down 9,200 in a month that made 7,700 of profit. The comparison column shows why: money owed by customers rose from 28,400 to 41,800 (13,400 more), and a 3,500 deposit on a new ute sits in vehicles, not expenses. 7,700 − 13,400 − 3,500 = −9,200: the profit is real, it is just sitting with customers and in the ute.
4. Aged Receivables Summary. 41,800 is owed: 25,600 is not yet due and 16,200 is overdue, including 11,500 from one property manager over 60 days. That one call is worth more than any cost cut.
5. Aged Payables Summary. 14,600 of supplier bills fall due in the next 30 days.
6. Short-term cash flow, 30 days. Xero projects 21,300 + 25,600 of invoices due − 14,600 of bills = 32,300. Two costs are not entered as bills, so the projection leaves them out: two fortnightly pay runs of 9,000 (18,000) and the September-October GST return of 6,900 due on 28 November (where that figure comes from in Xero). The realistic figure is 32,300 − 18,000 − 6,900 = 7,400, before the overdue 11,500 is collected.

The month looks fine on the Profit and Loss alone. Across the six reports it says three things: chase the property manager this week, put the plant price rise into quotes, and do not order the trailer until the 11,500 is in.

Custom reports: set them up once

Every Xero report can be changed and saved, and a saved version keeps its settings for next month:

1. Open the report and set it up: the date range, a Compare with column (previous month and same month last year are the two worth having), and cash or accrual basis.
2. Edit layout (the wording varies by version) lets you rename and reorder rows, group accounts into a heading, hide empty accounts and add a formula row. A useful one on the Profit and Loss is gross margin: Gross Profit divided by Total Trading Income, shown as a percentage. Another is operating profit, which the standard layout does not show (see operating profit).
3. Save as a custom report and give it a name you will recognise, such as “P&L monthly with margin”. It then appears with your custom reports, and you can star it as a favourite.
4. Bundle reports into a pack. The Management Report (or a custom report pack) puts several reports in one PDF with a cover page and notes. The monthly management pack guide shows what to put in it.

Two things trip people up. In the newer reports a custom layout belongs to one report, so a layout saved on the Profit and Loss does not carry over to the Profit and Loss by month; save each one you use. And a custom report holds its settings, not a fixed set of numbers, so check the date range before you export it next month. Xero custom reports goes through the layout editor step by step, with a worked example.

Mistakes that make Xero reports wrong

• Reading reports before reconciling. Unreconciled bank lines mean missing sales or costs in every report. Reconcile first, always.
• Reading one month on its own. Without a comparison column you cannot tell whether 7,700 of profit is good. Compare with last month and the same month last year.
• Trusting the projection. The short-term cash flow counts only invoices and bills. Wages, GST or VAT and loan repayments not entered as bills are missing, as in the example above.
• Mixing cash and accrual. Some reports default to accrual and some can be switched; comparing a cash-basis report with an accrual one gives nonsense. See cash vs accrual in Xero.
• Ignoring the Balance Sheet. Most “where did the money go?” questions are answered there, not on the Profit and Loss. Profit but no cash walks through the usual causes.

Common questions

What are the main financial reports in Xero? The Profit and Loss, the Balance Sheet, the Statement of Cash Flows, the Aged Receivables and Aged Payables reports, the Trial Balance and the Bank Reconciliation Summary. For an owner checking the business each month, the Profit and Loss, Balance Sheet, the two aged reports and the short-term cash flow projection answer most questions.

Where are reports in Xero? Under Accounting > Reports, or Reporting in the newer menu. The reports page lists them by type and has a search box. Starred reports appear as favourites at the top.

How do I create a custom report in Xero? Open the report, set the dates and comparison columns, use Edit layout to add, rename or group rows and add formula rows, then choose Save as and name it. It appears with your custom reports and keeps its layout for next time. The exact button names vary by version.

Can Xero email reports automatically? Not as a regular scheduled email for most reports at the time of writing. You can save a custom report or pack and export it, then send it yourself. Xero report scheduling covers what Xero does and does not do, and the options to automate it.

Which Xero report shows profit by month? The Profit and Loss with monthly columns: set the date range to 12 months and choose to show each month, or compare with the previous 11 periods. The Profit and Loss by month guide shows the steps and how to read the trend.

How often should I run Xero reports? The aged receivables and short-term cash flow weekly, because they change fastest and are where cash problems show first. The Profit and Loss and Balance Sheet monthly, after the month is reconciled. The Trial Balance at quarter and year end.

Is there one Xero report that summarises everything? The Business Snapshot puts profit, gross margin, biggest expenses, cash and the average time to get paid on one page, compared with the previous period. It shows what moved but not why, so use it as the starting point. The Business Snapshot guide reads one month with it.

The six reports, read for you every Monday

Running six reports and lining them up takes 15 minutes, and the useful part is the comparison, not the reports. ReportPilot reads your Xero figures and sends a short plain-English email every Monday: cash in the bank and how it moved, how sales and net profit compare with last month, who owes you and how much is overdue, and bills due soon. Its dashboard shows 24 months of sales, profit, cash and money owed to you by month. It asks Xero for read-only access, so it can read your accounts but never change them, and there is a 14-day free trial with no card.