How To Calculate Cash Burn in Sage 300 | Arithmix
Learn how to calculate cash burn in Sage 300 with our step-by-step guide. Discover the key metrics to track your company's cash flow and make informed financial decisions. Start managing your cash burn effectively today.
Calculating cash burn is an essential task for any business owner or manager. It helps you understand the rate at which your company is spending its cash reserves and how long your business can sustain its operations without additional funding. In this article, we will discuss what cash burn is, when it is valuable to calculate it, and how you can calculate it using Sage 300.
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 burn is an important metric for startups and other businesses that are not yet profitable, as it helps them understand how long they can sustain their operations before running out of cash.
For example, if a company has $100,000 in cash reserves and spends $10,000 per month on operating expenses, its cash burn rate is $10,000 per month. This means that the company can sustain its operations for 10 months before running out of cash.
When Is It Valuable To Calculate Cash Burn?
Calculating cash burn is valuable for any business that is not yet profitable or is experiencing a cash flow crunch. It helps you understand how much time you have before you need to secure additional funding or make changes to your business model to reduce expenses.
Startups, in particular, need to calculate their cash burn rate regularly to ensure they have enough runway to achieve profitability. Investors also look at a company's cash burn rate when deciding whether to invest in a startup or not.
How to Calculate Cash Burn Using Sage 300
Sage 300 is a powerful accounting software that can help you calculate your cash burn rate quickly and easily. Here's how:
- Open Sage 300 and navigate to the General Ledger module.
- Select the "Financial Reports" option from the menu.
- Choose the "Cash Flow Statement" report from the list of available reports.
- Select the date range for the report, typically a month or a quarter.
- Review the report to find the "Net Cash Used in Operating Activities" line item. This represents your cash burn rate for the selected period.
By using Sage 300 to calculate your cash burn rate, you can quickly and easily understand how much time you have before you need to secure additional funding or make changes to your business model. This information can help you make informed decisions about the future of your business and ensure its long-term success.
How Do You Calculate Cash Burn in Sage 300
Sage 300 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 Sage 300 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 Sage 300, 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 Sage 300 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 Sage 300 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.Use Arithmix free