Xero supplies the record of what has already happened and what has already been agreed: the bank transactions you have reconciled, the invoices you have raised, the bills you have approved, the templates that repeat every month. Your finance team supplies everything the ledger cannot know yet: when each customer will actually pay, the commitments nobody has invoiced, and the dates payroll and tax leave the account. The connection is the easy part. The quality of the forecast is decided by how well the team handles its half.

That split is worth understanding before you judge any forecast built on Xero data, because most of the disappointment finance teams report with automated forecasting comes from expecting the sync to do the second half. It cannot. This piece sets out what arrives from Xero object by object, what the team adds and how, and the handful of mechanics that turn the two halves into a number you can plan on. If you want the setup sequence, our guide to setting up automated cash flow forecasting with Xero covers it; if you are still deciding whether Xero's own projection is enough, start with whether you need a forecasting tool if you already use Xero.

What arrives from Xero, object by object

A connected forecasting tool reads your Xero organisation through the official API. Xero exposes a great deal through that API; what a forecast uses is a narrower set, and each object becomes something specific in the forecast.

Bank accounts and credit cards. Every account you include supplies its reconciled transactions and its balance. In Float, the starting balance is the balance in Xero for the accounts you include, and the historic balances are worked backwards from today using reconciled transactions only. That last word matters more than it looks: a bank-feed line that has landed in Xero but not yet been reconciled does not reach the forecast, so a fortnight of unreconciled lines is a fortnight the forecast cannot see.

Sales invoices. An approved invoice becomes an expected receipt on the date the forecast expects it to be paid. Which date that is depends on the finance team, and is covered below. Until it is paid, the invoice sits in the forecast as a future inflow; once the payment is reconciled, the actual replaces it.

Bills. An approved bill becomes an expected payment in the same way. Bills are usually the better-behaved half of the ledger, because the team controls when they are paid, but a bill entered late is a cost the forecast learns about late.

Repeating invoices and bills. Xero's repeating templates come across, so a monthly retainer or a quarterly licence appears in the forecast before the individual invoice exists.

Draft invoices. These are imported only if you switch the option on in Float's company settings. Whether you want them depends on how your team uses drafts: as a holding pen for work that will definitely be billed, or as a scratchpad. Either is fine, as long as the forecast treats them the way you do.

Manual journals. Journals are imported when the manual-journal setting is enabled. This is the route by which payroll posted as a journal reaches the forecast, and it is the first thing to check when payroll seems to be missing.

Some Xero objects are not imported into Float at all: the Xero budget, purchase orders, quotes and tracking categories. Two of those are worth a second look. Purchase orders and quotes are the ledger's record of commitments that have not yet become bills or invoices, and their absence from the forecast is precisely where the finance team's second half begins.

Data flows one way. Float reads Xero through a read-only connection and never writes anything back, so nothing you do in the forecast can alter your books. The same rule cuts the other way: if a due date or expected date is changed in Xero, it overwrites the date you set in Float on the next import. Float imports automatically once a day at an hour you choose, with a manual sync whenever you have just updated the ledger. The forecast is refreshed daily rather than continuously.

The three things the connection cannot know

Everything above is a fact the ledger already holds. A forecast also needs three kinds of information the ledger does not hold, and no sync can manufacture them.

The first is when money will actually move. An invoice carries a due date, and for a large minority of invoices the due date and the paid date are different days. The second is what has been agreed but not yet invoiced or billed: the contract signed last week, the hire starting next month, the equipment order placed by email. The third is timing that is regular but invisible in the invoice and bill flow: payroll, the employer taxes and pension contributions that follow it, and VAT or GST, which is collected on your sales for weeks before it leaves in one payment.

Each of these has a method. Together they are the finance team's half of the forecast.

Expected payment dates

The short-term forecast rests on this input, and it is the one Xero's due dates cannot supply on their own. The UK Department for Business and Trade's 2025 research found that half of businesses with 10 to 49 employees had been affected by late payment in the previous year, and Australia's Payment Times Reporting Regulator found that two thirds of invoices from large businesses to their small suppliers are paid within terms, while the slowest five per cent take 64 days against a 29-day term. Most customers pay roughly when they said they would. A minority pay late enough to move the forecast, and they are rarely the same customers each month.

The working hierarchy is simple. A confirmed promise to pay beats an adjustment for a customer's known approval cycle, which beats that customer's average payment behaviour, which beats the contractual due date. Most invoices in a ledger of a few hundred lines only need the third rung. In Float, Smart Expected Dates, which is available for Xero users, applies each customer's average days late from your own payment history to new invoices and bills as they are imported, starting from three months of history and extending to twelve. It is applied at import and never recalculated, so a forecast does not shift under you when averages move, and any date can be overridden by hand at any time, or an invoice split into part payments.

Xero can do part of this itself: its Cash Flow Manager suggests an expected date from a customer's payment history and lets you add expected dates to overdue invoices one at a time. A dedicated forecast applies the same idea across the whole ledger at once. In Float, an invoice or bill that is overdue with no expected date set is assumed to be paid today and flagged in the app, which is the conservative default for a cash-out item and the optimistic one for a receivable. Overdue receivables are the first list to work through each week for exactly that reason.

Commitments the ledger has not seen yet

The second half of the team's work is the cash the business has agreed to receive or spend before an invoice or bill exists. Professional-body guidance frames a cash forecast around the timing of these items rather than the accounting for them: ICAEW's guidance for businesses lists PAYE and National Insurance, VAT, loan repayments and capital spend among the questions a forecast has to answer. In practice the categories a finance team of three to six keeps an eye on are a signed contract not yet invoiced, work in progress, purchase orders raised but not billed, accrued costs, an agreed hire, and tax that has not yet been assessed.

In a connected forecast these are carried as budgets, and the forecast treats a budget as a placeholder that invoices, bills and transactions fill as they arrive. Float gives the team four kinds. A repeating budget for anything on a rhythm, weekly through annual, with step-ups and step-downs for a known price change. A one-off budget for the equipment order or the tax bill. An auto budget that tracks the last month or the three- or six-month average for a cost line the team does not want to maintain by hand. And a linked budget that follows another line by a percentage and a delay, which is how commission lands sixty days after the sale it relates to, or stock is bought ahead of the revenue it produces. Budgets can be pasted in from a spreadsheet grid; there is no file import, and the paste works in the base forecast only.

Keeping this half tidy comes down to two habits. Agree who owns the exception queue, so a new Xero account created after go-live lands somewhere rather than nowhere. And retire budgets when the thing they stood for has ended, because a recurring line keeps projecting until a person stops it.

Payroll and tax timing

Payroll is the largest regular outflow for most businesses at this size, and it is rarely one date. The pay run leaves on payday. The employer taxes and contributions leave later, on statutory dates that differ by market, and a forecast that puts the whole cost on payday is wrong by weeks on a material sum. Whether payroll reaches the forecast automatically also depends on how it is recorded: payroll posted as a cash transaction syncs like any other; payroll posted by journal needs the manual-journal setting switched on first.

The statutory dates below are the ones to carry as budgets, on the correct dates rather than on payday. They are current at the 2026/27 tax year where one applies; check your own position with the authority named.

United Kingdom

PAYE and Class 1 National Insurance go to HMRC by the 22nd of the following tax month if you pay electronically, or the 19th by post, and employers whose usual bill is under £1,500 a month may be able to pay quarterly. Employer National Insurance is 15% on earnings above the secondary threshold of £5,000 a year, or £417 a month, for 2026/27. Employee pension deductions must reach the scheme by the 22nd of the month after they were deducted; employer contributions follow the scheme's own payment schedule rather than that date, which is a distinction worth getting right because the two often leave in different weeks. Sources: HMRC and The Pensions Regulator.

United States

Form 941 deposit timing depends on the look-back period. Employers who reported up to $50,000 are monthly depositors and deposit by the 15th of the following month; above $50,000 they are semi-weekly depositors, depositing on the Wednesday or the Friday after payday depending on which day wages were paid. Any day on which $100,000 accumulates triggers a deposit the next business day, whichever schedule you are on. FUTA is deposited by the last day of the month after any quarter in which the liability passes $500. State withholding runs on each state's own timetable, so those dates come from the states you employ in. Source: IRS Publication 15, 2026.

Australia

Superannuation guarantee is 12% of qualifying earnings, and since 1 July 2026 it follows payday rather than the quarter: under Payday Super, the contribution for each pay run must reach the employee's fund within seven business days of payday. The old quarterly cycle applies only to earnings paid before that date, so a forecast still carrying quarterly super is now wrong on both amount and timing in any given week. PAYG withholding is paid quarterly with the BAS by small withholders, up to $25,000 a year, and monthly by the 21st by medium withholders, $25,001 to $1 million. Source: ATO.

New Zealand

Employers with annual PAYE and ESCT under $500,000 pay monthly, by the 20th of the following month. Above that threshold, payment is twice monthly: the 20th for paydays in the first half of the month, and the 5th of the following month for the rest. Employer KiwiSaver contributions and ESCT go to Inland Revenue with PAYE on the same cycle, and the default employer contribution rate rose to 3.5% on 1 April 2026. Source: Inland Revenue.

VAT and GST follow the same logic in the other direction: the tax you collect on sales sits in the account until the return is paid, and a forecast that treats it as your cash is wrong until the day it leaves. UK VAT is paid one month and seven days after the end of the period; Australian quarterly BAS payments fall on 28 October, 28 February, 28 April and 28 July; New Zealand GST is paid on the 28th of the month after the period ends, with two-monthly filing the default. UK corporation tax leaves nine months and one day after year end for companies below the large-company threshold, which is long enough after the profit was earned for it to be forgotten. For Xero users in the UK, Australia and New Zealand, Float forecasts the VAT or GST payment automatically; the corporation tax bill is a one-off budget on its due date.

Why the split decides forecast quality

A ledger-fed forecast is only as good as three mechanics, and each of them depends on the team's half being done.

The first is how the forecast reconciles a budget with the actuals that arrive against it. In Float, the higher of the budget and the actual is used in the current month, at the level of each individual account, and at month end the actuals replace the budget entirely. That rule is what makes a budget safe to carry: if the real bill comes in under the placeholder, the placeholder holds until the month closes; if it comes in over, the actual takes over immediately. It also means a budget nobody retires keeps inflating the outflow after the underlying cost has stopped.

The second is what counts as an actual. Only reconciled transactions do. That is why reconciliation cadence, which sounds like bookkeeping hygiene, is a forecasting decision: Float's own guidance is to reconcile daily, or at least weekly, because every unreconciled line is a cash movement the forecast does not yet know about. In the first two weeks of a short-horizon forecast almost every item is a known invoice, bill or transaction, so a miss in that window is nearly always a data problem rather than a forecasting one. No independent study quantifies how much short-term variance comes from timing rather than amount for businesses of this size, and the practical rule works without one: investigate the first fortnight's misses as ledger problems first.

The third is direction. Because the flow is one way and the ledger overwrites the forecast on sync, the team's additions have to live where the ledger will not touch them. Expected dates survive until someone changes the date in Xero; budgets survive until someone retires them. Anything the team has written into the forecast should be the kind of thing the team would defend in the weekly review, because that review is the only place the two halves are reconciled with each other.

How Float fits

Float is a cash flow forecasting tool built around exactly this division of labour. It connects to Xero in about three minutes through the official API with a one-way, read-only connection, imports once a day or on demand, and takes only reconciled transactions into the forecast. The Xero half arrives as described above; the team's half is handled with expected dates on any invoice or bill (set by hand, applied from each customer's history, or split into part payments), four kinds of budget for the commitments the ledger has not seen, and a threshold line on the cash graph that shows the date the balance would cross it. Scenarios sit as layers on the base forecast, so a hire or a lost customer can be tested without touching the numbers the ledger supplied, and budgets against actuals show where the team's half is drifting from what happened.

The Xero cash flow forecasting page lists what syncs and what does not, and plans are on the pricing page. For the setup sequence, read setting up automated cash flow forecasting with Xero; for the question of whether Xero's built-in projection is enough for your team, read do you need a cash flow forecasting tool if you already use Xero.

Frequently asked questions

What data does Xero send to a cash flow forecast?

A connected forecast reads your bank accounts and credit cards with their reconciled transactions, your sales invoices and purchase bills, repeating invoice and bill templates, draft invoices if you enable them, and manual journals if you enable those. Float does not import the Xero budget, purchase orders, quotes or tracking categories. Everything else the forecast needs, above all expected payment dates and commitments not yet invoiced, is added by the finance team.

Does the finance team still have to enter anything once Xero is connected?

Yes, and that is by design rather than a shortcoming of the connection. The ledger supplies what has happened and what has been raised; the team supplies when customers will actually pay, the commitments that have no invoice or bill yet, and the statutory dates on which payroll taxes, pension contributions and VAT or GST leave the account. Those are judgements and dates the ledger does not hold, so no sync can supply them.

Why does my forecast still miss when it is connected to Xero?

Most misses in the first two weeks of a connected forecast are data problems: transactions not yet reconciled, an invoice paid late against its due date, a bill entered after it was paid, or a budget left running for a cost that has stopped. The connection only sees reconciled transactions and the invoices and bills that exist, so the fix is usually in the ledger or in the expected dates rather than in the forecasting tool.

Does Xero know when a customer will actually pay?

Xero holds the due date on every invoice, and its Cash Flow Manager can suggest an expected date from a customer's payment history and let you add expected dates to overdue invoices individually. A dedicated forecasting tool applies that idea across the whole ledger: in Float, Smart Expected Dates, available for Xero users, applies each customer's average days late to new invoices as they are imported, and any date can be overridden or split into part payments.

What happens to an overdue invoice in the forecast?

In Float an overdue invoice or bill with no expected date is assumed to be paid today and marked with an indicator in the app, so the cash appears in the immediate window rather than disappearing. For receivables that is the optimistic assumption, which is why the overdue list is the first thing to review each week: set an expected date from what the customer has told you or from their payment history, and the forecast moves to match.

Does payroll come through from Xero automatically?

It depends on how payroll is recorded. Payroll entered as a cash transaction syncs like any other transaction. Payroll posted by journal does not appear until the manual-journal import is switched on in Float's company settings, after which those journals and any future ones sync automatically. In every case the employer taxes and pension or superannuation contributions leave on statutory dates after payday and are carried as budgets on those dates.

Can Float change anything in my Xero data?

No. The connection uses the official Xero API and is one-way and read-only, so Float can read your Xero data but cannot edit, add or delete anything, and you can disconnect at any time. The reverse is worth knowing too: if a due date or expected date is changed in Xero, it overwrites the date set in Float on the next import, which is why the team's additions belong in expected dates and budgets that the ledger will not overwrite.

How often is the forecast updated from Xero?

Float imports your Xero data automatically once a day at an hour you choose in company settings, and you can run a manual sync whenever you have just updated the ledger. It is a daily picture rather than a live feed, which is the right cadence for a forecast reviewed weekly; the review, not the sync, is where the team's half of the forecast is kept current.

How much of the forecast does the team actually have to maintain each week?

Less than the split suggests, because most of the team's half is set once and only revisited when something changes. A weekly review at this size typically means working through the overdue receivables and setting expected dates where the customer's behaviour has changed, checking the exception queue for new Xero accounts, retiring any budget whose cost has ended, and confirming the statutory tax dates for the coming month are in. For most finance teams of three to six that is under an hour.

If your forecast is connected to Xero and still surprises you, the cause is almost always in the team's half. Float gives that half somewhere to live: connect Xero in about three minutes and see the ledger's half arrive on its own, with a 14-day free trial and no card required.