How Cassence works out your cash, burn and spending
The rules behind the first three numbers you see in Cassence: what counts as cash, what is and isn’t burn, and how spending is sorted. With a sample month to try.
Cash is a bank balance a person confirmed, rolled forward with the bank movements in your books. Burn is money out for running the business less money in from customers, counted when it moved in the bank and averaged over three complete months. Transfers between your own accounts, investment, loans and loan principal are left out.
Cash: a balance someone confirmed
Your cash is the balance of your bank and cash accounts as confirmed by a person: the closing balance of a bank statement you checked, or one you typed from your bank app. An overdraft you’ve drawn is taken off.
Between confirmations, Cassence rolls the balance forward with the bank movements in your books, and always shows the date it was last confirmed. When that date is more than 14 days old, a check asks for a newer statement.
Money in and money out
- Money in is what customers paid you, plus any other business income that reached the bank.
- Money out is what you paid to suppliers, staff and the tax authorities for running the business, including GST, TDS and advance tax.
Both are counted by the date the money moved in the bank, at the amount that moved, GST included. That’s the cash view, and it’s the one burn and runway use.
What isn’t burn
Some money moves without the business spending or earning anything. Cassence leaves it out of money in and money out:
- Transfers between your own accounts. Your total cash doesn’t change.
- Investment and loan money coming in. It adds to cash, and so to runway, but it isn’t income.
- Loan principal paid back. The interest is a cost and counts; the principal doesn’t.
Walk through a month
Ten entries from an example month at the bank. Open each to see whether it counts, and why.
An example month at the bank. Open an entry.
The seed round, the transfer and the loan principal moved ₹60,50,000, and none of it is burn. Cassence then averages three complete months like this one, so one unusual month doesn’t swing your runway.
Burn and runway
gross burn = money out a month net burn = money out − money in runway = cash ÷ net burn (3-month average)
Spending, by category and vendor
Every account in your books is sorted into a category, so spending can be compared whatever your accounts are called:
| Category | Includes |
|---|---|
| Salaries and staff costs | Salaries, wages, bonus, employer PF and ESI, staff welfare |
| Rent | Office and warehouse rent |
| Software, cloud and internet | Subscriptions, hosting, phone and internet |
| Marketing and advertising | Ads, agencies, promotions |
| Legal, audit, CA, consultants | Professional fees |
| Travel | Travel, lodging, meals, vehicles |
| Office and admin | Supplies, printing, repairs, utilities |
| Direct costs | One category each for materials, direct labour, freelancers on client work, shipping, and marketplace and payment fees |
| Bank charges | Bank fees |
| Interest paid | Interest on loans and overdrafts |
The Spending screen shows each category a month on average, biggest first, against an earlier three months, with the vendors behind it and the fastest-growing cost called out.
Two views of the same books
| View | Counts by | Used for |
|---|---|---|
| Cash | The date money moved in the bank, GST included | Cash, burn, runway, the forecast |
| Accrual | The invoice or bill date, without GST | Revenue, costs, margins, what customers owe |
So sales can grow while burn rises too: revenue counts when you invoice, cash when the customer pays.
When a number can’t be trusted yet
If an account in your books has no category yet, any figure that depends on it is marked incomplete, and the checks that use it say “can’t check yet” instead of guessing. You sort the account once under Tidy your books, and every figure after that includes it.
Every figure also keeps the list of entries it added up, so it can always be traced back to your books.
See spending in the demoA sample company’s costs, by category and vendor. No sign-up.Questions
How does Cassence calculate burn rate?
Money out for running the business less money in from customers, by the date it moved in the bank, averaged over the last three complete months. Transfers between your own accounts, investment and loan money, and loan principal are left out.
Is GST included in burn?
Yes. Burn counts the actual amounts that moved in the bank, so GST you collect and pay is in it. Revenue and costs are shown without GST.
Why isn’t my fundraise in money in?
Investment adds to your cash, so it makes runway longer, but it isn’t money the business earned. Counting it would make burn look smaller than it is.
Why does Cassence need a confirmed bank balance?
Books can drift from the bank. Runway rests on a balance a person checked against a statement, rolled forward with the bank movements in the books.
Where does my cash figure come from between statements?
From the last confirmed balance, plus and minus the bank movements in your books since, with the confirmation date shown beside it.
See your own numbers worked out
Hand over your books once. Cass works out your cash, burn and spending every night, and shows what each figure rests on.