Understanding the difference between cash and accrual reports in Xero is key to getting the right insight from your financial data. Whether you’re tracking real-time cash flow or assessing your overall business performance, choosing the right report view can make all the difference.
What are cash and accrual reports in Xero?
There are two ways Xero can show your financial activity. The main difference is about when income and expenses are recorded in your reports.
What is a cash report in Xero?
A cash report only shows money when it actually comes in or goes out of your account. It’s great for tracking real-time cash flow.
Example: You send an invoice in March but don’t get paid until April—this income will only show up in April’s report.
What is an accrual report in Xero?
An accrual report records income and expenses when they’re invoiced or billed, even if the money hasn’t moved yet.
Example: If you issue an invoice in March, it’ll show up in March’s report—even if you don’t get paid until April.
Why would I choose cash or accrual reporting
- Cash reporting is ideal if you want to stay on top of your cash flow or run a small business using cash-basis accounting.
- Accrual reporting gives a fuller, more accurate view of your business performance over time—often required for larger businesses or for tax purposes.
How do I switch between cash and accrual reports in Xero?
When you’re viewing most reports (like Profit & Loss or Balance Sheet), just use filter at the top right to toggle between cash and accrual views.
Will changing the report type mess with my accounts
Nope! Switching between cash and accrual views only changes how the data is shown. Your actual transactions and chart of accounts stay the same.
If you need help with this, or with other advice, then please get in touch with our accounting team.