The monthly management cash flow report - which indicators SME owners should watch

A very common question from SME owners is not how much profit they made this year, but why the accounts look profitable while the bank balance is always tight. Profit is an accounting opinion; cash is a fact. Companies do not fail because of losses on paper, but because they run out of cash exactly when payroll, suppliers or taxes are due. This article outlines a one-page management cash flow report that owners should receive in the first week of every month.

Why the annual cash flow statement is not enough

For financial years starting on or after 1 January 2026, the enterprise accounting regime under Circular 99/2025/TT-BTC replaces Circular 200/2014/TT-BTC; the balance sheet is renamed the Statement of Financial Position, while the cash flow statement remains a mandatory part of the financial statements. But that is a statutory report, prepared annually and often finalised weeks after year-end. To make decisions, owners need a management report: monthly, compared with the plan, and looking at least 13 weeks ahead.

Seven core indicators to watch every month

1. Available cash at month-end: cash and bank balances less deposits, guarantees and amounts already committed. This is the money you can actually use.
2. Net operating cash flow versus profit: if profit has been positive for several months while operating cash flow is negative, cash is stuck in receivables or inventory.
3. Days sales outstanding (DSO) with a receivables ageing: separate balances overdue by more than 60 and 90 days.
4. Days inventory outstanding (DIO): especially important for trading and manufacturing businesses.
5. Days payables outstanding (DPO): shows how well the business uses supplier credit, or whether it pays earlier than necessary.
6. Cash conversion cycle = DSO + DIO - DPO: the number of days cash is tied up in the operating cycle.
7. Cash runway = available cash divided by average monthly net cash outflow, relevant when the business is cash-negative.

Illustrative example: a trading company with revenue of about VND 3 billion a month, DSO of 75 days, DIO of 60 days and DPO of 30 days has a cash conversion cycle of 105 days. Bringing DSO down to 60 days by tightening payment terms shortens the cycle to 90 days - releasing roughly half a month of revenue, about VND 1.5 billion, without any new borrowing.

Put tax obligations into the cash calendar

Taxes are certain, fixed-date payments, yet they are often left out of forecasts. The management report should have a separate line for each obligation:

• VAT, monthly or quarterly depending on the company's filing period.
• Quarterly provisional corporate income tax (CIT), due on the last day of the first month of the following quarter; total provisional payments for the four quarters must be at least 80% of the final annual CIT, otherwise late payment interest applies.
• Personal income tax withheld from salaries, plus social, health and unemployment insurance contributions paid monthly.
• Expected additional tax at annual finalisation, which is better accrued monthly than left until year-end.

Non-cash payment: when how you pay decides your tax cost

How a company pays directly affects how much tax it owes. Under Decree 320/2025/ND-CP guiding the Law on Corporate Income Tax No. 67/2025/QH15, purchases of goods and services of VND 5 million or more per transaction are deductible only with non-cash payment evidence. The tax authority has confirmed this also applies to salary and wage payments of VND 5 million or more per payment. For VAT, Article 26 of Decree 181/2025/ND-CP requires non-cash payment evidence for purchases of VND 5 million or more (VAT inclusive) to claim input VAT credit.

Building the report in five steps

1. Close the cash balances and reconcile them to bank statements within the first 3-5 working days of the month.
2. Classify actual cash flows into operating, investing and financing, with tax and payroll shown separately.
3. Compare actuals with the monthly plan and explain material variances.
4. Update a rolling 13-week forecast based on the collection schedule, supplier payment schedule and tax calendar.
5. Finish with three concrete actions for next month, such as collecting a specific overdue balance or renegotiating payment terms.

How Kaizen can help

Kaizen designs a management cash flow report around your business model and builds in the tax payment calendar, so accounting numbers become a decision-making tool. Starting with our free tax health check, we will point out spending at risk of being disallowed for tax and the cash bottlenecks to tackle first.