How To Calculate Cash Burn in Deltek | Arithmix

Calculating cash burn is an essential task for any business owner or manager. It helps you understand how much money your company is spending each month and how long you can sustain that level of spending before running out of cash. In this article, we will discuss what cash burn is, when it is valuable to calculate it, and how to calculate it in Deltek.

What Is Cash Burn?

Cash burn is the rate at which a company is spending its cash reserves. It is calculated by subtracting the total cash outflows from the total cash inflows over a specific period. Cash outflows include expenses such as salaries, rent, utilities, and other operating costs, while cash inflows include revenue from sales, investments, and other sources.

Knowing your cash burn rate is crucial for managing your company's finances. It helps you determine how much money you need to raise, how much you can afford to spend, and how long you can sustain your current level of spending.

When Is It Valuable To Calculate Cash Burn?

Calculating cash burn is valuable in several situations. For example, if you are a startup, you may need to raise funds from investors to keep your business running. Investors will want to know your cash burn rate to determine how much money you need and how long it will last.

If you are a small business owner, you may need to manage your cash flow carefully to avoid running out of cash. Knowing your cash burn rate can help you make informed decisions about spending and investments.

How to Calculate Cash Burn in Deltek

Deltek is a popular software used by many businesses to manage their finances. To calculate cash burn in Deltek, follow these steps:

1. Open the Deltek software and navigate to the financial management module.
2. Select the period for which you want to calculate cash burn, such as a month or a quarter.
3. Identify all cash inflows during the selected period, such as revenue from sales, investments, and other sources.
4. Identify all cash outflows during the selected period, such as salaries, rent, utilities, and other operating costs.
5. Subtract the total cash outflows from the total cash inflows to get your cash burn rate for the selected period.

Once you have calculated your cash burn rate, you can use it to make informed decisions about your business finances. For example, if your cash burn rate is high, you may need to cut expenses or raise funds to avoid running out of cash. If your cash burn rate is low, you may have more flexibility to invest in growth opportunities.

In conclusion, calculating cash burn is an essential task for any business owner or manager. It helps you understand your company's financial health and make informed decisions about spending and investments. By following the steps outlined in this article, you can easily calculate cash burn in Deltek and use the information to manage your business finances effectively.

How Do You Calculate Cash Burn in Deltek

Deltek itself isn’t naturally geared towards letting you calculate complex metrics like Cash Burn. As an alternative, teams typically use products like Arithmix to import data from Deltek and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Deltek, combine it with data from other systems, and create calculations like Cash Burn.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Cash Burn in Arithmix

Calculating metrics like Cash Burn is simple in Arithmix. Once you've created your free account, you’ll be able to import your Deltek data, and use it to create natural language formulas for metrics like Cash Burn.

Arithmix is designed to give you the power to build any calculations you want on top of your Deltek data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.