What is Cash Reporting? And Why It Matters

Cash is king in the hospitality industry. You know it well – it's the lifeblood that keeps businesses running smoothly, funds growth, and ensures survival through tough times. Yet, managing cash flow can be a daunting task for many hospitality owners.

Understanding your cash flow is crucial not only for making the best informed decisions but also for predicting future needs and mitigating risks. Unfortunately, many business owners rely on outdated or incomplete cash flow statements, which can give them a fragmented view of their financial health (more common than you’d think!).

This article will explore the importance of cash reporting, what it entails, and why it matters for your hospitality business.

What is Cash Reporting?

According to Ross Hunt, Outmin’s CEO and a certified accountant, cash reporting is “all of the cash movements in your business aggregated into a single report.” Essentially, cash reporting is the best way to understand how money is moving in and out of your business.

Unlike traditional methods that may only track cash through a primary bank account, modern cash reporting includes a detailed view of all cash receipts and disbursements across various platforms and accounts. This can encompass:

• Bank Accounts: Transactions from primary business checking accounts.
• Payment Platforms: Movements through platforms like Stripe, Revolut, and Wise, including any lags between receipt and deposit.
• Credit Cards: Expenses charged to business credit cards, which are treated as cash outflows even before they hit the bank account.

By consolidating information from these diverse sources, cash reporting provides a complete picture of a business’s cash flow. It’s meant to be the most accurate representation of your business’s financial reality. 

A good cash report should give you a precise breakdown of:

• Who: This shows detailed information about each payee or payer, allowing you to see exactly who you paid or received money from, across all accounts and platforms.
• What: This breaks down expenses or income by category, such as marketing, wages, or supplies, showing you what the money was spent on or earned from.

By pulling all this data together, the cash report gives a clear and accurate picture of where your money is actually going and coming from. It doesn’t rely on estimates or guesses, just the real numbers.

This makes it easier to see exactly how money is flowing within the business and helps you spot issues or missing information that needs a closer look.

What is the Difference Between a Cash Report and a Cash Flow Statement?

“A lot of people think that an accounting cash flow statement is a cash report, but it’s not at all. What we actually see is very few people doing true cash reporting. What we always argue in Outmin is [cash reporting] is the fastest way to get a fully factual picture of your business,”

Ross explains, adding that

“what we’ve seen in the past is cash flow statements that emerge along with your Profit and Loss and your balance sheet, but it’s not actually a cash report.”

So, let’s clarify the difference between a true cash report (the type of report Outmin offers its clients) and the typical cash flow statement that traditional accountants deliver to businesses still to this day.

Cash Flow Statements

• High-Level Aggregation: Cash flow statements provide aggregated data summarising general financial movements.
• Lack of Detail: They often don't provide details on individual transactions or specific sources and uses of cash, leaving some gaps and questions unanswered. 
• Delayed Information: Because cash flow statements are usually created alongside profit and loss reports and balance sheets, they might not capture the true state of your cash flow.
• Accruals and Estimates: Cash flow statements often include accrued expenses and income, which may not represent the actual cash flow at any given moment.
• Limited Scope: Typically, cash flow statements only cover primary bank accounts and may not account for other financial sources like credit card transactions.

Cash Reporting

• Complete Overview: Cash reporting gives you a full picture by bringing together all your cash movements from various sources like bank accounts and credit cards. This ensures you see the complete flow of cash.
• In-Depth Details: It breaks down exactly who you’ve paid, what the payments were for, and how much was spent, helping you understand your cash flow more clearly.
• Immediate Accuracy: Unlike traditional methods, cash reporting provides real-time, precise information without relying on estimates or accruals. This means you get the most accurate view of your finances right away.
• Easy Access: With automated systems, you can access your cash report instantly. There’s no need for manual number-crunching or guesswork – everything is ready at your fingertips.
• Flexible Reporting: Business owners can generate reports for any time period, be it weekly, monthly, or annually.

Why Does Cash Reporting Matter?

It’s probably not difficult to guess by now, but cash reporting is an essential tool for your hospitality business. Think of it as your financial compass. Here’s what it helps you achieve:

• Make informed decisions: By understanding your cash flow, you can make data-driven decisions about spending, investments, and pricing. 
• Predict future needs: Identify potential cash shortages or surpluses, allowing you to plan accordingly and avoid financial surprises.
• Optimise operations: Pinpoint areas where you might be overspending or underutilising resources.
• Secure funding: A healthy cash flow is essential for attracting investors and securing loans.
• Manage risks: Identify potential financial challenges early on and take steps to mitigate them.

Above all, a good cash report enhances your financial control! Real-time accuracy in cash reporting means you’re not relying on estimates or outdated figures. This up-to-date information helps you spot discrepancies, manage cash flow more efficiently, and avoid surprises.

Outmin: The Strongest Cash Reporting for Hospitality

The reality is that many businesses still rely on outdated cash reporting methods. Traditional setups often lead to fragmented and inaccurate cash flow insights, making it difficult to get a true picture of your financial health.

This norm has been accepted for far too long. With Outmin, however, there’s no reason to settle for less.

Outmin disrupts this outdated model by using the power of AI, Machine Learning, and data science. Our platform provides real-time, accurate cash flow reports directly on an intuitive dashboard that is easy to understand and act upon. This means you get a clear, comprehensive view of your cash flow (who and what) with just a few clicks.

“The interesting thing about our cash report is that it’s the first autonomous report Outmin built, where we can release a report without the need for a human to do any actual work to generate it. It was a big milestone for us that we can do consolidated cash reporting that is factual and fully automated, and obviously, that unlocks things for our customers,”

explains Ross. 

By automating the process and providing actionable insights, Outmin empowers you to make data-driven decisions, optimise cash flow, and achieve financial stability. Our platform goes beyond basic reporting – we offer you the tools to track key performance indicators (KPIs) and identify trends that can help you grow your business.

On top of that, Outmin seamlessly integrates with your existing systems to handle all aspects of your financial operations. From comprehensive accounting and meticulous payroll management to thorough bookkeeping, we manage it all, so you don’t have to.

Don't let outdated reporting methods hold your business back. Get a demo of our solution to see how Outmin can transform your cash reporting and financial management today.