Burn rate, runway and ARR

How much cash is going out each month, how long it lasts, and what recurring revenue is doing.

Advisor → Monthly review, and Reports → SaaS metrics.

Three figures that answer "how are we doing" faster than a P&L does.

Burn is what left the business this month — operating expenses plus cost of sales. It is taken from the closed month's actuals, not an estimate.

Runway is cash on hand divided by burn, expressed in months. It appears in the monthly review with the cash balance it was worked out from, so the number can be checked rather than taken on trust. When burn is zero or negative, no runway is shown — a business that is not burning cash has no runway to report, and printing a very large number there would be worse than printing nothing.

ARR and MRR come from the subscription ledger rather than from invoices, so an annual contract billed once contributes its monthly share and a mid-month upgrade is counted from the day it took effect. The ARR waterfall breaks a period's movement into new, expansion, contraction and churn, which is the shape investors ask for.

All three re-compute as the books change — closing a month, posting a late bill, or recording a subscription change moves them without anything having to be rebuilt.