Xero short-term cash flow: what will be in the bank in 30 days

Short answer: Xero’s short-term cash flow, in the Analytics area (Xero is rolling out a newer version called Cash flow manager), starts from today’s bank balance, adds the sales invoices due in the period and takes off the bills due in the period, then shows the projected balance day by day for the next 7 or 30 days. It is only as good as what is in Xero: invoices and bills with real due dates. Wages, GST or VAT, loan repayments and card spending that are not entered as bills are often missing, and customers who pay late make the projection look better than it will be. Read it as “the best case from what Xero knows”, then subtract what it does not know.

Where to find it

In Xero, open Analytics (or Reporting, depending on your version) and choose Short-term cash flow. The newer Cash flow manager sits in the same area, with an overview tab and separate cash-in and cash-out sections. What you will see:

Item	What it means
Today’s balance	The bank accounts you included, as of the last bank feed
Projected balance (7 or 30 days)	Today’s balance + invoices due - bills due, by the end of the period
Daily chart, table or calendar	The same projection day by day, so you can see the low point, not only the end
Cash runway	Days until the balance reaches zero if money comes in and goes out as projected
Cash buffer	Days until the balance reaches zero if no more money comes in and payments carry on

You can choose which bank accounts count (leave out petty cash, a till cash float set up as its own account, or a savings account you never touch) and, in Cash flow manager, add one-off adjustments and an overdraft limit, and look further out, up to 180 days. Cash flow manager also suggests when each invoice will really be paid, based on how that customer has paid you before, and spots regular payments from your last three months of bank transactions. Plan names and what each plan includes differ by region, so if you cannot see these screens, check your Xero plan: in the UK and New Zealand the cash view runs 30 days on Ignite, 60 on Grow, 90 on Comprehensive and 180 on Ultimate (see what each Xero plan costs a month).

What goes into the projection

• Money in: sales invoices that are approved in Xero and due in the period. Overdue invoices count only if an expected payment date is set. The newer Cash flow manager can also include quotes.
• Money out: bills (supplier invoices) approved in Xero with a due date in the period.
• Starting point: the bank balance from your feeds, the same figure as the bank accounts widget on the Xero dashboard. If the feeds are a week behind, so is the projection.

What it usually leaves out

Anything that is not an approved invoice or bill with a due date, unless you add it or Cash flow manager picks it up as a regular payment:

1. Wages and super or pension, if pay runs are not entered as bills ahead of time.
2. GST, VAT or PAYG. The payment is due on a fixed date but is rarely a bill in Xero.
3. Loan and lease repayments paid by direct debit.
4. Card spending and subscriptions that only appear once the bank feed shows them.
5. Work not invoiced yet. A job you will finish and invoice next week is not money in until the invoice exists.
6. Late payers. An invoice due on day 12 is counted on day 12, whether that customer usually pays on day 12 or day 40.

A worked example: $24,500 that is really $700

Made-up figures for a small services business, looking 30 days ahead:

	Amount
Bank balance today	$18,000
Invoices due in the next 30 days	+ $22,000
Bills due in the next 30 days	- $15,500
Xero’s 30-day projected balance	$24,500
Two pay runs, not entered as bills	- $9,000
GST payment due on day 28	- $6,800
Projection with known costs added	$8,700
$8,000 invoice from a customer who usually pays three weeks late	- $8,000
A realistic 30-day balance	$700

On the screen the month looks comfortable. Once the wages and the tax payment are in and one slow payer is moved to when they really pay, the business finishes the month with $700, and depending on the order money arrives and leaves, it can dip lower than that on the way. Nothing here is unusual: it is what happens when the costs that never arrive as bills are left off.

To fix the example in Xero, add the pay runs and the GST payment as adjustments, set the slow customer’s expected payment date, and look at the projection again. Then the low point is the number to plan around.

How to use it each week

1. Check the bank feeds are up to date and reconciled to roughly today, or the starting balance is wrong. If the balance in Xero and the bank disagree, here is how to find the gap.
2. Look at the low point, not the end. A projection that ends at $10,000 can still dip to -$3,000 on the day wages and GST go out together.
3. Add the known costs that are not bills: wages, tax, loan repayments. In Cash flow manager, check the regular payments it found are right.
4. Move late payers to their real dates. Your aged receivables report shows who is late and by how much; the guide to who owes you money in Xero shows how to chase them, and Xero invoice reminders shows how to make Xero chase the small ones for you.
5. Decide early. If the low point is too close to zero, the choices are the same as always: chase invoices, agree later dates on some bills, or arrange an overdraft before you need it, not on the day.

Short-term cash flow vs the other cash reports

• Short-term cash flow / Cash flow manager looks forward: what the balance will be, from invoices and bills.
• Statement of Cash Flows looks back: where cash came from and went last month or quarter.
• Balance Sheet is one day: cash, what customers owe you and what you owe, at a date.

If the business is profitable but the projection keeps falling, the guide to profit but no cash in Xero and the free profit but no cash tool show where the money goes. To look a full quarter ahead week by week, see how to build a 13-week cash flow forecast from Xero. If you would rather pay for a forecasting app that connects to Xero and models scenarios, Float compared with ReportPilot sets out what each does (Float forecasts; ReportPilot does not). For a longer view than 30 days, the free cash runway calculator works out how many months your cash lasts at your recent pace, without logging in to anything. To decide how much cash the business should keep in reserve, see how many months of cash should a business have?

Common questions

Why can’t I see short-term cash flow in Xero? What you see depends on your Xero plan, your region and your user role. Xero is moving some regions to the newer Cash flow manager, so look for either name under Analytics or Reporting. If neither is there, ask whoever manages the Xero subscription to check the plan and your user permissions.

Why is the projected balance higher than what I end up with? Usually because costs that are not bills in Xero (wages, GST or VAT, loan repayments, card spending) are missing, and because invoices are counted on their due date even when the customer pays weeks later. In the worked example above, that turns a projected $24,500 into $700.

Does the projection include overdue invoices? Only if you set an expected payment date on them. Otherwise an invoice that is already late drops out of the projection, so check your aged receivables alongside it.

How far ahead can Xero project cash flow? Short-term cash flow looks 7 or 30 days ahead. Cash flow manager can look further, up to 180 days, with adjustments you add yourself. For a longer view at your recent pace, the free cash runway calculator works it out in months.

Is this the same as a cash flow statement? No. The projection looks forward from invoices and bills that are due. The Statement of Cash Flows looks back at where cash actually came from and went in a past period.

How often should I check it? Once a week is enough for most small businesses, after the bank feeds are reconciled. Check it more often when the low point is close to zero, or in a week when wages, tax and a large bill fall due together.

Getting this without opening Xero

ReportPilot reads your Xero figures and sends a short email every Monday in plain English. It shows the bills due in the next 14 days against the cash in the bank, and says so when they are more than the cash. When cash has fallen in two of the last three months, it shows how long cash lasts at that pace. It also covers sales and profit against last month and money owed to you that is past due. It asks Xero for read-only access, and there is a 14-day free trial with no card.