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How to Calculate Burn Rate in Google Sheets with AI

Cody Schneider•

Knowing your company's burn rate is the first step towards managing its financial health and runway. This article will walk you through exactly how to calculate and track your burn rate in Google Sheets, first with basic formulas and then with a bit of "AI magic" using add-ons that simplify the process.

What Exactly is Burn Rate (and Why Does It Matter)?

Burn rate is the speed at which your company spends its cash reserves, typically measured on a monthly basis. For startups and businesses running on a fixed amount of capital from investors or savings, this is one of the most important metrics to watch. If you're spending money faster than you're making it, you're "burning" cash.

Understanding your burn rate helps you answer the most critical question for survival: "How much time do we have left before we run out of money?" This period is known as your cash runway.

There are two main types of burn rate to know:

  • Gross Burn Rate: This is the total amount of money your company spends in a month. It includes all operating expenses like salaries, rent, marketing costs, software subscriptions, and utilities. It’s a simple look at your total cash outflow.

  • Net Burn Rate: This is the more commonly used figure. It represents your company’s net monthly cash loss. To calculate it, you subtract the cash you brought in (revenue, new funding, etc.) from your gross burn.

For example, if your company spends $50,000 in a month (Gross Burn) and brings in $15,000 in revenue, your Net Burn is $35,000. It's this number that truly tells you how much cash you are losing each month.

Step 1: Gather Your Financial Data

Before you can do any calculations, you need to collect the right information. You don't need to be an accountant, but you do need access to a few key numbers for each month you want to analyze.

You'll primarily need:

  • Start and End Cash Balances: Check your business bank account statements. What was your cash balance on the first day of the month and the last day of the month?

  • Cash Inflows: This isn't just revenue listed on an invoice, it's the actual cash that hit your bank account. This could be from sales, customer payments, or new investment funds.

  • Cash Outflows (Expenses): Tally up every dollar that left your account. This includes payroll, rent or mortgage, marketing and advertising spend, software costs, inventory purchases, and anything else you paid for.

Your accounting software (like QuickBooks or Xero) is the best place to find this information. If you don't use one, your bank and credit card statements will have everything you need. It will just take a bit more time to organize.

Step 2: Set Up Your Burn Rate Calculator in Google Sheets

Now, let’s build a simple but effective template in a new Google Sheet. This structure will help you keep things organized and make the formulas easy to implement.

Create these columns in your sheet:

  • Column A: Month

  • Column B: Starting Cash

  • Column C: Revenue (Cash In)

  • Column D: Total Expenses (Cash Out)

  • Column E: Ending Cash

  • Column F: Net Burn

  • Column G: Gross Burn

Now, let's start filling it in.

1. Enter your historical data: Start with the first month you want to track (e.g., "Jan-24"). Manually enter the Starting Cash, total Revenue for the month, and total Expenses for the month.

2. Calculate the Ending Cash for the first month: The formula is your starting cash, plus what you brought in, minus what you spent. In cell E2, type:

=B2+C2-D2

3. Automate the Starting Cash for the next month: The cash you start with one month is the exact same as the cash you ended with the previous month. In cell B3, type this formula to automatically pull the value from last month's ending balance:

=E2

Now you can drag this formula down column B. Each new month will automatically start with the correct cash balance from the previous month. After setting this up, your sheet will have the foundation it needs for the burn rate calculations.

Step 3: Calculate Burn Rate with Simple Formulas

With your data organized, calculating your gross and net burn is straightforward.

Calculating Gross Burn

Gross Burn is just your total expenses. Our sheet is already set up for this! Column D has all of your monthly expenses, so Column G is simply going to mirror it. This might seem redundant, but it's good practice to have a dedicated "Gross Burn" column for clarity when sharing reports.

In cell G2, enter:

=D2

Drag the small blue box at the bottom-right corner of the cell down the column to apply this to all your rows.

Calculating Net Burn

Net burn shows the true amount of cash your business lost in a given month. You can calculate this in two ways: by subtracting revenue from expenses, or by looking at the change in your cash balance.

Using the second method is often more accurate as it reflects your actual cash movement. In cell F2, enter this formula:

=B2-E2

This subtracts your ending cash from your starting cash. If the number is positive, that's your net burn. If it's negative, congratulations - you were cash-flow positive that month!

Calculating Average Burn Rate and Runway

Calculating the burn for a single month is useful, but an average gives you a more stable number for planning. At the bottom of your data, you can calculate the average net burn over the last three months.

Find an empty cell and enter:

=AVERAGE(F2:F4)

(Adjust the range F2:F4 to cover the months you want to average.)

Now for the most important calculation: your cash runway. This tells you how many months you can survive at your current average burn rate.

In another cell, use this formula:

=E4 / [Your Average Burn Cell]

Replace E4 with the cell containing your most recent Ending Cash, and [Your Average Burn Cell] with the cell where you just calculated the average net burn. The result is the number of months you have until your cash runs out.

Step 4: Using AI in Google Sheets to Speed Up Analysis

Doing all the above manually is great for understanding the fundamentals. But it can be tedious and prone to error, especially as your financial data gets more complex. This is where AI-powered Google Sheets add-ons can be game-changers.

Tools like Numerous.ai, GPT for Sheets and Docs, and others integrate AI directly into your sheets, allowing you to generate formulas, summarize data, and find insights just by writing simple text prompts.

For our burn rate sheet, this offers several advantages:

  • Formula Generation: Instead of remembering formulas, you can just describe what you want to do. For example, you could click on cell F2 and prompt the AI, "Calculate the difference between the starting cash in B2 and the ending cash in E2." The tool would automatically insert the =B2-E2 formula for you. This eliminates typos and speeds up the setup process.

  • Data Cleaning: Have messy expense data exported from your bank? You can ask an AI tool to categorize it. Just highlight the list of transactions and prompt "Categorize these expenses into broad groups like Payroll, Marketing, and Software."

  • Quick Insights: You can ask questions about your data in plain English. For example, select your expenses column and ask, "What was the average monthly expense over the last 6 months?" without having to write an AVERAGE formula. Or, "In which month was the net burn the highest?" The AI will analyze the numbers and give you a direct answer.

While these tools don't fully automate data collection, they act like a smart assistant who lives inside Google Sheets. They help you skip the technical learning curve of remembering function syntax and let you focus on the questions you want to ask your data.

Step 5: Visualize Your Burn Rate with Charts

Numbers in a spreadsheet are useful, but a visual chart makes trends immediately obvious. Google Sheets makes this incredibly easy.

To create a simple chart of your burn rate over time:

  1. Select your data in the 'Month' column (Column A).

  2. Hold down the Ctrl key (or Cmd on a Mac) and select your data in the 'Net Burn' column (Column F).

  3. Go to the nav menu and click Insert > Chart.

  4. Google Sheets will likely recommend a line chart by default, which is perfect for this purpose. You can customize the titles and colors in the chart editor that appears on the right.

This chart will instantly show you if your burn is increasing, decreasing, or staying stable over time. Is the line trending up? That means you're spending more cash each month and need to investigate why. Is it trending down? Great job - you're extending your runway.

Final Thoughts

Tracking your burn rate and runway in Google Sheets is an essential exercise for any business owner. By structuring your data cleanly and using simple formulas, you can get a clear picture of your company's financial timeline. AI add-ons can then layer on top of this process, making formula creation faster and ad-hoc analysis more accessible, regardless of your spreadsheet skills.

While using Google Sheets is a massive step up from having no tracking at all, the manual work of exporting data from your bank or QuickBooks and copying it into the sheet can still be a weekly chore. That’s where we wanted to streamline things. With Graphed, you connect your financial platforms like QuickBooks and Stripe directly, so your data is always live. You can just ask, "What’s my average net burn rate for the last quarter and what’s my current cash runway?" and get an instant, auto-updating dashboard - no more manual data entry or building spreadsheets from scratch.