Cash and runway

Where to begin

• List current cash, expected receipts and payments by date. Separate fixed commitments from spending that can be deferred and check how reliable each receipt is.

• If cash is going out faster than it comes in, divide available cash by average monthly net outflow for a rough runway. Include irregular costs and make a slower-sales scenario.

• Use the estimate to choose an action: collect overdue payments, adjust costs, discuss terms early or compare suitable finance. If cash flow is positive, monitor reserves instead.

Make a simple cash forecast

For each week or month, write the opening cash balance, likely collections and payments due. Subtract payments from available cash and expected receipts. Mark uncertain collections separately and test what happens if they arrive later. Update the forecast against actual bank movements.

For example, ₹60,000 available divided by an estimated ₹20,000 monthly net outflow suggests roughly three months before other changes or irregular costs. This illustration is not a guarantee: taxes, debt, seasonal costs and delayed payments can shorten it. Seek advice when commitments cannot be met.

Go deeper

• Can the business make money?
• Choose a funding starting point
• Find an accountant or adviser

Choose more stages and concerns