How To Calculate Cash Burn in Sage Contractor | Arithmix

Calculating cash burn is an essential part of managing your business finances. It helps you understand how much money your company is spending each month and how quickly you're burning through your cash reserves. In this article, we'll walk you through the steps to calculate cash burn in Sage Contractor, a popular accounting software used by many businesses.

What Is Cash Burn?

Cash burn is the rate at which a company is spending its cash reserves. It's 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. It helps them understand how long they can sustain their operations before running out of cash.

For example, if your company has $100,000 in cash reserves and is spending $10,000 per month, your cash burn rate is $10,000 per month. This means that your 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 wants to understand its financial health. It's especially important for startups and other businesses that are not yet profitable. By calculating cash burn, these businesses can determine how long they can sustain their operations before running out of cash. This information can help them make important financial decisions, such as when to raise additional funding or when to cut expenses.

Calculating cash burn is also useful for established businesses that are experiencing financial difficulties. By understanding their cash burn rate, these businesses can identify areas where they can cut expenses and improve their financial performance.

In conclusion, calculating cash burn is an important part of managing your business finances. By understanding your cash burn rate, you can make informed financial decisions and ensure the long-term success of your business.

How Do You Calculate Cash Burn in Sage Contractor

Sage Contractor 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 Contractor 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 Contractor, 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 Contractor 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 Contractor 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.