Small business cash planning
Cash Runway Calculator
Estimate how many months your current cash can support the business after expected receipts, payroll, fixed costs, variable costs, one-off payments and a protected reserve.
Enter Your Cash Position
Your Cash Runway
Enter your cash and monthly movement to see the result.
Monthly cash use
Cash runway is a warning signal. Update it with real bank movements, not only invoices or sales targets.
What Cash Runway Tells You
Cash runway is the length of time a business can keep operating before available cash falls to a minimum reserve or reaches zero. It is not the same as profit. A company can report a profit and still run short of cash because customers pay late, stock must be bought before sales are made, VAT and payroll taxes fall due, loan repayments leave the bank, or growth adds costs before receipts arrive. A useful runway calculation starts with the bank balance and then models money moving in and out month by month.
This calculator is built for practical decisions: whether to reduce costs, chase debtors, delay a purchase, raise funding, change prices, cut a subscription, move a tax amount into a separate pot or speak to a lender before the pressure becomes urgent. The main number shows base-case runway. The stress case shows runway if receipts are lower than plan. The protected reserve makes the answer stricter than a simple “cash divided by burn” calculation, because most businesses cannot sensibly wait until the bank balance is zero before acting.
How To Choose Inputs
Use cleared cash in the bank for the opening balance. Do not count unpaid invoices unless they are included in the monthly receipts line and you have adjusted for likely payment timing. If a customer often pays 45 days after invoice date, place the receipt in the month it is likely to arrive, not the month the invoice is raised. The same rule applies to grants, loans and investment: only include a one-off incoming amount when it is committed enough for the decision you are making.
Separate fixed and variable costs. Payroll, rent, insurance, software, subscriptions and accountancy fees usually keep running even when sales fall. Materials, delivery, card fees, marketplace costs and fulfilment tend to move with sales. The variable-cost percentage makes the stress case more realistic: if receipts fall, some variable costs fall too, but fixed costs usually do not. Put VAT, PAYE, corporation tax instalments, loan payments and hire purchase amounts in the finance field if they leave cash each month.
Formula And Method
Available cash = cash in bank - minimum reserve - one-off costs + confirmed one-off incoming cash
Monthly outflow = payroll + fixed overheads + tax, loan and other payments + variable costs
Monthly burn = monthly outflow - monthly cash received
Runway in months = available cash / monthly burn, when monthly burn is positive
When monthly receipts are greater than monthly outflows, the calculator shows that the base case is cash-positive rather than forcing a runway number. That does not remove risk. Cash-positive months can still hide a future VAT bill, seasonal dip, late customer, stock order or annual renewal. The stress calculation reduces receipts by the percentage you enter and recalculates variable costs from that lower receipt figure. That gives a quick view of how fragile the plan is if sales, collections or contract renewals disappoint.
Worked Examples
Early-stage team
A start-up has GBP 32,000 in cash, a GBP 6,000 reserve, GBP 18,000 expected monthly receipts and GBP 24,540 of total monthly costs after variable costs. It is burning about GBP 6,540 each month before one-off items, so a GBP 4,500 renewal can remove nearly three weeks of runway.
Retail stock month
A shop may look stable in a normal month, then place a large seasonal stock order. Enter the stock order as a one-off cost rather than spreading it across every month. That shows the immediate pressure on cash even if the stock later sells at a profit.
Service firm with late invoices
A service business may invoice GBP 25,000 a month but collect only GBP 16,000 in the current month. Use cash received, not invoices raised. Then run a second version where a late debtor pays, so you can see whether the pressure is timing or real monthly burn.
Runway Signals To Watch
| Signal | What it may mean | Useful next check |
|---|---|---|
| Less than one month of runway | The business may soon struggle to meet wages, rent, suppliers or taxes. | Prepare a 13-week cash forecast and speak to creditors or advisers before payments are missed. |
| One to three months | There is time to act, but decisions need dates and owners. | Chase overdue invoices, reduce non-essential spend, review stock orders and test funding options. |
| Three to six months | The position may be workable if forecasts are accurate. | Track forecast against actual bank movements weekly and keep a reserve for tax and payroll timing. |
| Cash-positive base case, weak stress case | The plan relies on sales or customer payments arriving as expected. | Review debtor ageing, contract renewals, concentration risk and the timing of large purchases. |
| Large fixed-cost share | Costs may not fall quickly if revenue drops. | Check lease terms, staff commitments, notice periods, software contracts and finance agreements. |
Cash Runway Vs Cash Flow Forecast
A runway figure is a fast warning metric. A cash flow forecast is more detailed: it lists expected receipts and payments by week or month and shows the bank balance after each period. GOV.UK and Business.gov.uk both point business owners towards cash flow forecasting because it shows when money comes in and goes out, rather than only whether the business is profitable on paper. Use this calculator to get the headline pressure point, then build a forecast if the runway is short, if payments are lumpy, or if the business is applying for funding.
Actions That Change Runway
There are only a few ways to extend runway: increase cash received, reduce cash paid out, delay non-critical payments with agreement, add funding, improve stock turns, collect debt faster or change the reserve target. The best action depends on the cause. If the problem is late payment, debtor work may matter more than cutting marketing. If fixed costs are too high, small savings on variable costs may not move the result. If a tax bill is the issue, payment planning should happen early, with professional advice where needed.
FAQs
Is cash runway the same as burn rate?
No. Burn rate is the amount of cash used in a period. Runway is how long available cash lasts at that burn rate. The calculator shows both because a low burn can still be risky if the starting cash balance is low.
Should unpaid invoices be counted as cash?
Not in the opening cash field. Put expected receipts into the monthly income field only when the payment is likely to land in the bank during the period being modelled.
Why protect a minimum reserve?
A reserve gives the business room for payroll timing, tax payments, bank delays, supplier deposits and small shocks. A runway that assumes cash can fall to zero is usually too optimistic.
What if the base case is cash-positive?
Run the stress case anyway. A cash-positive average can still hide a future payment date, annual renewal, seasonal fall, customer concentration issue or stock purchase.
Can this replace an accountant or insolvency adviser?
No. If the business may not pay debts as they fall due, take advice promptly. This calculator is a planning tool, not a solvency opinion.
Sources
- Insolvency Service. (2023). Director information hub: Cashflow. GOV.UK. https://www.gov.uk/guidance/director-information-hub-cashflow
- Department for Business and Trade. (2026). Write a business plan. GOV.UK. https://www.gov.uk/write-business-plan
- Department for Business and Trade. (2026). Preparing for funding applications: Prepare a cash flow forecast. Business.gov.uk. https://www.business.gov.uk/support/funding-for-business/preparing-for-funding-applications/
Last reviewed: 14 May 2026.