Monthly net burn is cash paid out minus cash received during a month. Cash runway estimates how many months available cash can support that burn: divide unrestricted cash by average monthly net burn. If a company has $900,000 available and burns $75,000 monthly, its estimated runway is 12 months. Simple, but timing matters. An unpaid invoice is not cash in the bank.

Tips: Update the model weekly, and compare expected receipts with deposits actually received. Keep a base case and a slower-sales case. If burn is near zero or changes sharply, a simple runway ratio may mislead; show the cash balance month by month instead.

A useful burn model starts with revenue that can be defended, not a hopeful annual growth rate. Break sales into units, price, conversion rate, and payment timing. For a global buyer, show each market in local currency, then convert using a stated exchange-rate assumption. A five percent price rise means little if collections arrive sixty days late. Keep delayed-payment and slower-sales cases visible.

Payroll needs more than salaries. Include employer contributions, benefits, recruitment, and the months required to fill each role. The U.S. Bureau of Labor Statistics’ March 2024 Employer Costs for Employee Compensation report put benefits at 29.7% of private-industry compensation. That is a useful reference, not a universal payroll uplift. Costs vary by country and role. Model local figures separately. Small detail, large effect.

Operating costs should distinguish fixed commitments from costs that move with sales: cloud usage, freight, rent, and transaction fees. Then show funding by date, amount, and expected availability; an unsigned financing plan is not cash. The Federal Reserve’s 2024 Report on Employer Firms found 56% of surveyed firms faced financial challenges. Stress-test a funding delay, not just a smaller round. Models are imperfect. A three-month delay can expose assumptions that an annual spreadsheet hides.

Global buyers evaluating cash-burn model solutions should look beyond a clean dashboard. IFRS Accounting Standards are required or permitted in more than 140 jurisdictions, but local adoption rules and entity-level obligations differ. That distinction matters. A model should connect cash forecasts to consistent accounting inputs while preserving local reporting treatments and currencies. Compare monthly payroll, supplier invoices, lease payments, and receivable delays against actual cash movements. Keep assumptions visible, especially when exchange rates shift or revenue arrives late.

A strong solution also supports traceable changes. Finance teams should be able to see who changed a hiring date, payment term, or forecast rate, and when. Reconcile model outputs with ledger data regularly; IFRS alignment alone does not guarantee a reliable cash forecast. Nor does a familiar reporting format prove every local requirement has been met. Teams can overestimate standardization. Some differences are easy to miss.

A burn model is only useful when its forecasts survive contact with actual cash flows. Compare each month’s projected opening balance, receipts, and payments with bank records, not just the closing balance. A close ending figure can hide badly timed inflows or an overlooked payroll run.

That matters.

For global buyers, record cash flows in their original currencies and note conversion dates, settlement delays, and local payment schedules. Small timing differences can move a 13-week cash position more than a modest budget variance. Track forecast and actual amounts side by side, then label each gap by cause: delayed customer payment, hiring change, or supplier invoice.

Keep assumptions visible. If the forecast used a steady collection period but customers paid late, revise the assumption and show the effect across the next 13 weeks. Do not overwrite old forecasts; dated versions reveal whether accuracy is improving.

Models miss things. A one-off transfer or an unusual billing cycle may distort the comparison, so document exceptions instead of treating every variance as a trend. Revisit the projection weekly, while accepting that some estimates will remain imperfect.