XeroAccountingOperating Cash Flow
Operating cash flow measures the cash generated (or consumed) by the core trading activity of the business over a period. Unlike profit, it is not distorted by accruals, non-cash items, or timing of invoices.
Xero metric
Operating cash flow measures the cash generated (or consumed) by the core trading activity of the business over a period. Unlike profit, it is not distorted by accruals, non-cash items, or timing of invoices.
Full guide: definition, formula, and benchmarksWhy Operating Cash Flow matters for Xero users
Profit is an opinion, cash is a fact. A profitable business that consistently burns cash is heading somewhere difficult, usually because receivables are stretching or inventory is growing faster than sales. Operating cash flow tells you whether your P&L translates into real money in the bank.
Xero users can tie operating cash flow back to the specific accounts and customers driving the movement, turning it from a headline number into an actionable signal.
Driver
Conversion rate
Outcome · 58% contribution
Revenue
Understand and act on Operating Cash Flow with KPI Tree
Pull operating cash flow from Xero's Bank Summary report combined with the profit and loss report, through MCP or your warehouse. Link it causally to AR ageing, AP ageing, and revenue in the same metric tree so cash flow movements have traceable drivers.
Assign ownership to the CFO and set weekly alerts when operating cash flow turns negative or diverges materially from operating profit.
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Related Xero metrics Ready to add to your trees.
Cash Runway
AccountingCash Runway (months) = Cash Balance / Monthly Net Burn
Cash runway measures how many months the business can continue operating at its current net burn rate before cash runs out. It is the single most important survival metric for any business spending more than it earns.
View metricDays Sales Outstanding
AccountingDSO = (Accounts Receivable / Total Credit Sales) × Days in Period
Days sales outstanding (DSO) measures the average number of days it takes to collect payment after an invoice is raised. It is the most direct measure of the efficiency of your credit and collections process.
View metricBurn Rate
AccountingNet Burn Rate = Monthly Cash Outflows − Monthly Cash Inflows
Burn rate measures the net cash consumed by the business each month, calculated as the difference between cash outflows and cash inflows. Gross burn is total monthly spend; net burn is gross burn minus any revenue collected.
View metricGross Profit Margin
AccountingGross Profit Margin = (Revenue − COGS) / Revenue
Gross profit margin is the percentage of revenue left after subtracting the cost of goods sold. It shows how efficiently your business produces and delivers what it sells.
View metricExplore Operating Cash Flow across integrations
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