How to Use Nav’s Cash Flow Tool to Prepare for Taxes and Simplify Bookkeeping

How to use Nav’s Cash Flow Tool to prepare for taxes and simplify bookkeeping

When tax season rolls around, many small business owners scramble to figure out where their money went, what they earned, and what they owe. Consistent bookkeeping all year long can mean the difference between a chore and a simple task — and that’s exactly where Nav’s Cash Flow tool comes in.

Cash Flow Health helps shine a light on where your money is coming from, where it’s going, and the health of your business over time. By connecting your business accounts and using built-in bookkeeping tools, Nav turns everyday transactions into accurate financial reports you can use for tax prep, planning, and working with lenders.

Step 1: Connect your business accounts

To get started, navigate to the Cash Flow Health tab in your Nav dashboard and click the purple “Connect bank accounts” button. You’ll sign in to your bank through Nav’s Plaid integration, which is commonly used for secure account connections.

For the most accurate insights, connect all business accounts, including checking accounts and credit cards. Once connected, you’ll land on the Overview sub-tab and receive confirmation emails from both Nav and Plaid.

Step 2: Get a clear view of your cash flow

At the top of the Overview page, you’ll see a monthly revenue and expense trend chart. This interactive chart shows how money flows in and out of your business over time. Click on any month to view revenue, expenses, net profit, and month-over-month changes.

Below the chart, you’ll find a summary of revenue and expenses by category, making it easy to spot your biggest income sources and identify any costs that may be creeping up. You can sort columns to quickly analyze where your money is going — a key step for staying tax-ready year-round.

Step 3: Use reports to prepare for taxes

Next, head to the Reports sub-tab. With your Nav Prime subscription, you can create and download three essential financial reports using custom reporting periods:

• Profit & Loss Statement
• Balance Sheet
• Statement of Cash Flow

You can also compare performance month-over-month or year-over-year, which is especially helpful for tax filing, financial reviews, or working with your accountant or CPA.

The Profit & Loss statement shows how much your business earned and spent during a specific period. It helps you understand whether you’re actually profitable — not just busy — and track expenses that may affect your tax liability.

The Balance Sheet provides a snapshot of what your business owns versus what it owes. Big purchases like equipment and other capital expenditures appear here, and this report is often required when applying for loans or credit. Lenders may also request additional documentation.

The Statement of Cash Flow shows how money moves through your business. Even profitable businesses can run into trouble without enough cash on hand, making this report critical for avoiding cash crunches.

Step 4: Keep transactions organized automatically

Accurate reports start with accurate transactions. In the Transactions tab, Nav uses AI to suggest and transaction categories, so most of the work is already done. You can review and confirm categories to ensure accuracy with one click. Nav uses AI to suggest transaction categories”

You can even search for recurring vendors, like Uber for Business travel, and confirm multiple transactions at once. If you’ve added a phone number to your business profile, Nav will send SMS reminders to confirm categories — helping you stay organized on the go. SMS reminders are optional and require a valid phone number and consent. Message and data rates may apply.

Step 5: Set spending alerts to stay in control

Finally, you can set Safe Limits for debit cards in your Cash Flow settings. These alerts notify you when spending approaches a threshold you define, helping you manage cash before small issues become big problems.

Cash Flow Health brings together clear visibility, accurate bookkeeping, and commonly-used financial reports — all in one place. By keeping your transactions organized throughout the year, you’ll be better prepared for tax season and more confident making financial, credit, and growth decisions for your business.

The three financial statements you can create in Nav

Nav’s Cash Flow Health tool makes it easy to generate the three most important financial statements small business owners rely on. Each report pulls directly from your connected accounts and categorized transactions, so you’re not starting from scratch when it’s time to prepare for taxes or review your finances.

Balance sheet

In Nav, the balance sheet shows what your business owns, what it owes, and the equity you’ve built at a specific point in time. Assets like cash and equipment are weighed against liabilities such as loans, credit cards, and taxes owed, giving you a clear snapshot of your business’s financial strength. This report is commonly requested by lenders and useful when applying for credit.

What it tells you: How financially stable your business is and how much value you’ve built as an owner.

Profit & loss statement

Your profit and loss report summarizes your revenue and expenses over a custom time period, such as monthly or yearly. Because transactions are automatically categorized, you can quickly see how much your business earned, what it spent, and whether you’re profitable. This report is helpful for estimating taxes and spotting expenses that may be affecting your bottom line.

What it tells you: Whether your business is making money and where you can improve profitability.

Statement of cash flow

The cash flow statement in Nav shows how money is moving through your business across operating, investing, and financing activities. It highlights real cash coming in and going out of your accounts, helping you understand liquidity even when profits look strong on paper. This insight is critical for avoiding cash shortfalls and planning ahead.

What it tells you: Whether you have enough money on hand to cover expenses and invest in growth.

What is cash flow?

Cash flow is the cycle of money moving in and out of your business bank account through everyday operations, investing, and financing activities. Simply put, it’s the amount of cash you have available at any given moment to pay bills, cover expenses, and invest back into your business. Your business can be either cash flow positive or cash flow negative, and understanding the difference is critical for staying financially healthy — especially during tax season.

Positive cash flow occurs when more money is coming into your business than going out. This means your cash inflows outweigh your cash outflows, giving you flexibility to cover expenses, save for taxes, and plan for growth. Common examples of cash inflows include payments from customers (accounts receivable), sales of products or services, and borrowed capital such as lines of credit or small business loans. These inflows are often reflected on your income statement and play a key role in understanding how much cash your business truly generates.

Negative cash flow, on the other hand, happens when your business is spending more money than it brings in. Cash outflows include operating costs like payroll, taxes, rent, inventory, loan payments, and other business expenses. For example, if you borrow $75,000 in equipment financing, the lump sum you receive upfront counts as a cash inflow, while your monthly loan payments count as cash outflows. Tracking both sides accurately helps you avoid surprises, manage obligations, and ensure you have enough cash on hand — even if your business looks profitable on paper.

Why bookkeeping matters for small businesses

Bookkeeping gives you financial clarity year-round

Bookkeeping is the foundation of your business’s financial health, and Nav’s Cash Flow Health tool is designed to make it easier to stay organized without adding more work to your plate. By automatically pulling in transactions from your connected business accounts and categorizing them for you, Nav helps you maintain accurate records year-round — not just when tax season approaches. This consistent visibility makes it easier to track performance, plan ahead, and understand your true financial position.

Clean books make tax time simpler

Keeping your books up to date with Nav simplifies tax preparation. When transactions are categorized as they happen, you’re less likely to miss deductible expenses or spend hours sorting through bank statements later. Clean, organized records allow you to quickly generate trusted reports — like Profit & Loss statements and Balance Sheets — to share with your accountant or CPA, giving you confidence when it’s time to file.

Ongoing bookkeeping supports smarter decisions

Regular bookkeeping through Cash Flow Health also helps you spot issues early and make smarter decisions. Reviewing transactions and reports can highlight rising costs, unused expenses, or unusual activity before they impact your cash flow. With automated categorization, transaction reminders, and real-time insights, Nav turns bookkeeping from a once-a-year task into an ongoing habit that supports healthier finances, better credit readiness, and long-term business growth.

Nav’s Cash Flow Health tools are for informational and organizational purposes only and are not tax, legal, or accounting advice. Consult a qualified tax professional for guidance specific to your business