Reports You Need To Understand
The main reports you need to understand in Xero include:
- Profit and Loss
- Balance Sheet
- Aged Payables Summary
- Aged Receivables Summary
- Statement of Cash Flows
- Analytics - Business Snapshot
Reports in Xero can be found by clicking on the ‘Accounting’ drop down along the top menu and selecting ‘Reports’. If you don’t have access to these options, you may need to contact your administrator or accountant in order to increase your administration rights. This is also true if at any point whilst reading this blog you notice that you don’t have a particular option that we discuss.
Once in the ‘Reports’ page you’ll find it is broken into various sections as follows:
- Favourites: If you tick the star next to any report, it will appear both here and in the Accounting drop down menu for quick access. This is useful for reports you run regularly.
- All reports
- Financial Performance: Understand your organisation's financial position at a glance
- Financial Statements: Examine your organisation's performance with reports that cover costs, liabilities, revenue, assets, and equity
- Payables and receivables: See reports of the transactions you've had between your suppliers and your customers, as well as expense claims
- Payroll: Get valuable information on payroll activity, transactions, remuneration, pension and year end (relevant if you use Xero Payroll)
- Projects: Get data on your project financials, activity, chargeable time, and how much time your team spends on a project (relevant if your use Xero Projects)
- Reconciliations: Compare Xero and actual bank balances, get monthly account summaries, and reports to help with reconciling
- Taxes and balances: See your VAT and CIS reports, and reports related to your general ledger
- Transactions: View transaction details and search for duplicate statement lines
There’s a lot here, but as we’ve discussed, we’re going to look at the key reports that you need to look at to have clarity in your finances.
The navigation on reports can differ slightly from report to report, but here’s a brief summary of what to look out for. Whenever any of the following items are changed, you can click the ‘Update’ button in order to refresh the report with the new criteria.
Most reports have a date range that can be manually entered or a drop down option to select a predefined date range (such as last month).
Once you’ve defined your date range you can do a comparison with previous periods. It can be useful to choose the ‘Enter a different number’ option and compare ‘Last Month’ with the past 11 months. Or perhaps choosing Last Quarter and comparing with the last 3 months.
Compare Tracking Categories
Xero uses Tracking Categories to allow you to allocate transactions to a particular category. This has many uses including, allocating transactions to different geographic regions, business units or types of income (e.g. one-time vs recurring income). Charities will often use this area to support fund management.
It’s worth checking out our Profit and Loss blog which shows a practical example of how tracking categories can be used in your financial reporting and how it interacts with the structure of your reports.
The filter option allows you to filter reports based on many different criteria. Depending on the report and what setting you have you may see more or less options here.
The ‘More’ button often allows you to add additional analysis to your reports to give you even more detailed information. Once any item is ticked under this menu option and the ‘update’ button is clicked they will cause the report to change.
Accrual and Cash
Found under the ‘More’ Menu. When looking at your reports it will be set by default to show you based on the Accrual method (where income and expenses are recognised based on when an invoice was raised), but it can be changed to the Cash method (where income and expenses are only recognised when they are seen as cash in the bank.). More information can be found here.
Switching between these when looking at a report can sometimes be valuable. For example, when looking at your Profit and Loss, you can quickly see if the income and expenses from a given period (e.g. last month) have already gone through the bank.
Found under the ‘More’ Menu. This tick box adds the word ‘accrual basis’ or ‘cash basis’ to the report so if you’re sharing it other readers can quickly identify which basis the report is reporting on.
Found under the ‘More’ Menu .This tick box adds account codes next to the different categories on the report. This is most useful if you’ve migrated from another software that uses account codes and you need to identify which code the category relates to when cross referencing between old data and new data.
Found under the ‘More’ Menu . When ticked, the report will show values to two decimal places (e.g. including pence). When unticked, it will only show whole currency values (e.g. Pounds; GBP).
Percentage of Turnover
Found under the ‘More’ Menu. This tick box adds a new column which shows how much each line in the report represents of the overall turnover. So, all Sales categories will total 100% and all Cost of Sale and Expense categories will be shown as a percentage of this total sales figure.
Found under the ‘More’ Menu. This tick box is used when you are manipulating reports to show multiple periods or when the report is split into Tracking Categories. It totals all other columns on the right hand side.
Year to Date
Found under the ‘More’ Menu. This tick box provides an additional column showing what the year to date totals are for each category.
Net / Gross
Found under the ‘More’ Menu. Net refers to without VAT. Some reports are always shown in a particular way, but the Statement of Cash Flows provides the option to decide on whether you want figures to ignore VAT (Net) or include VAT (Gross)
Some reports allow you to choose which columns you want to show on your report. You can click on this drop down menu and tick the columns you want to show. For example, you may want to add an email and a phone number column to your Aged Receivables report so you have contact information readily available to chase people who owe you money. Obviously, this information is only going to show on the report if you’ve included it on the contacts account.
This option opens up a pop up that allows you to move the location of a column.
It may be the case that you’d like to look at information in specific chunks, for example, you might be a business that has multiple locations and want to see people who owe you money but based on each location. Grouping/summarising allows you to do this.
Found under the Grouping/Summarising Menu. This tick box groups all line items into the groups you’ve chosen. So if you have 10 people that owe you money in a specific region, you’ll see all ten lines of data grouped together on the report.
Found under the Grouping/Summarising Menu. This tick box summarises all line items into one total. So if you have 10 customers that owe you money in a specific region, you’ll see just one line showing the total owed by all 10 customers in that region.
Found under the Grouping/Summarising Menu. In the contacts section of Xero you’re able to sort your contacts into groups. If this is done and you tick the Contact Group tick box you’ll be able to sort the report data by that group of contacts. An example of when this might be useful is if customer accounts are allocated to a particular sales person, the contacts can be grouped and then you can view the reports broken down by their specific accounts.
Found under the Grouping/Summarising Menu. This tick box allows you to sort data on the report by the type of document it is. For example, you may want to see on your Aged Payables report who you owe money too, but want to break it down so expense claims are shown separately from general suppliers.
Found on the Aged Payables Summary and Aged Receivables Summary Reports this allows you to decide how many periods you’d like to report on and how long each period is. There is a tick box that also allows you to decide if you want to show the date on the ‘current’ column which identifies any money owed but not overdue. And you can also decide whether you want to include either the date or how long the money is owed by selecting either period number or date range.
This drop down has two choices, Due Date and Invoice Date. It allows you to decide whether you want the Ageing periods to start from the date of the invoice or when payment is due.
When using Xero you can create your own reports or have your accountant help you, however on some reports Xero has already provided some speedy reports based on common customisations. You can find these by looking for a little ‘>’ arrow on the left hand side of the screen.
When clicked on it will open up various reporting options, for example on the profit and loss report it shows the following:
- Budget Variance
- Current and previous 3 months
- Current financial year by month
- Current financial year by month - actual and budget
- Month to date comparison
- Year to date comparison
- Compare - if you have tracking categories set up it may also give you an option to compare these tracking categories.
Clicking on any of these reports can speed up the customisation process and are likely to provide more detail than the ‘off-the-shelf’ profit and loss.
You may want to add some useful information to the bottom of the report to help explain what is happening in the report. In order to do this you can click on ‘Insert Content’. There are three options to choose from:
Add text box - allows you to add generic text to the bottom of the report.
Add footer - very similar to a text box, but with a limit of 3 lines and no option to add a heading.
Enable Add Note - useful if you want a particular note to reference a specific piece of information on the report. A number will be shown next to the note and on the report next to the piece of data you are discussing.
You can also get even more creative and clever with Xero reports by clicking on ‘Edit Layout’ which will allow you to rearrange the columns, rows, totals and more. It’s recommended that you don’t do this unless you are extremely proficient with Xero and understand the accounting implications of the changes you’re making.