How To Calculate Cash Burn in Sage 50 | Arithmix

Calculating cash burn is an essential part of managing your business finances. It helps you understand how much money your business is spending each month and how long your business can continue to operate before running out of cash. In this article, we will discuss how to calculate cash burn and why it is valuable to do so.

What Is Cash Burn?

Cash burn is the amount of money your business is spending each month to cover its operating expenses. These expenses can include rent, salaries, utilities, and other costs associated with running your business. Cash burn is calculated by subtracting your monthly expenses from your monthly revenue.

For example, if your business generates $10,000 in revenue each month and has $8,000 in expenses, your cash burn is $2,000 per month. This means that your business is spending $2,000 more than it is earning each month.

When Is It Valuable To Calculate Cash Burn?

Calculating cash burn is valuable for businesses of all sizes, but it is especially important for startups and small businesses. These businesses often have limited resources and need to carefully manage their cash flow to stay afloat.

By calculating cash burn, you can determine how long your business can continue to operate before running out of cash. This information can help you make important decisions about your business, such as when to raise capital, cut expenses, or pivot your business model.

Additionally, calculating cash burn can help you identify areas where you can reduce expenses and improve your bottom line. By analyzing your expenses, you may be able to find ways to cut costs without sacrificing the quality of your products or services.

In conclusion, calculating cash burn is an important part of managing your business finances. By understanding how much money your business is spending each month and how long you can continue to operate before running out of cash, you can make informed decisions about the future of your business. So, take the time to calculate your cash burn and use this information to improve your business operations and financial health.

How Do You Calculate Cash Burn in Sage 50

Sage 50 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 50 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 50, 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 50 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 50 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.