One of the biggest benefits for you and your business by using accounting software such as Xero is accurate and timely reports.

At BFA, we encourage clients to be proactive and take control of the financial sustainability of your business.

Reports available in most accounting systems that you should be using are:

Bank reconciliations

This report shows you that the bank balance and your accounting system agree – if they don’t, you may need to finish your coding or check for any missing data. You should reconcile your bank accounts regularly to ensure that your software reflects the true state of your current position.

The Profit and loss report shows you how much income and expenses you have

We encourage clients to prepare budgets, and to enter these into your accounting system. You can customise these Profit and Loss reports to add in a variance column as well as a comparative year column. These reports will help you track your performance against the prior year and your objectives. As this report is available by a click of a button, that leaves you to spend all your time analysing the variances, identifying any gaps or opportunities for improvement.

Cash flow

It’s all good and well saying you made a profit of x but if you’re wondering where all that money went, run your eye over the cash flow report to see exactly where your money has gone.

The cash flow report will show all costs including drawings, tax, capital expenditure and loan payments. These don’t appear in the Profit and Loss Report so don’t be left confused wondering where has all your money gone?!

Balance sheet

Everyone wants to know their equity position. The Balance Sheet report is where you’ll find this. Just be aware that if you run this report, you will need to ensure items such as inventory are updated as this can impact the bottom line considerably.

Key Performance Indications (KPI’s)

You can also use all of these reports to set and monitor KPIs, which are measurable values that indicate how well you are achieving your strategic goals. KPI’s are a quick way to identify areas of improvement for your business.

While all these reports are exciting and beneficial for your business, it is important to note that the reports will be meaningless if your coding isn’t correct. Coding affects how your data is recorded, processed, and reported by your software, so it is essential that it is accurate and consistent.

Coding can also help you analyse your data in different ways, such as by product, service, customer, project, or location.

By knowing how to use your accounting software effectively and efficiently, you can take advantage of its many features and functions to produce reliable and useful reports that can help you manage your business finances better. If you would like to explore getting more out of your accounting system, contact the team at BFA .