The monthly board pack
Northwind's September pack: three statements, cash and runway with their basis, the variances worth a sentence, the 13-week low point, and every metric defined.
Every lesson in this track ends in the same place: a monthly board pack. It's the closed month's statements, cash and runway, the variances with their explanations, and every metric with its definition. The investor update is the letter. The pack is the numbers behind it, and anyone should be able to rebuild them from the books.
Step 1: The headline
One paragraph: what happened, what changed, what you need from the board.
Step 2: The three statements
Income statement, balance sheet and cash flow statement for the month, with the budget and, once there is one, the prior month beside them.
Step 3: Cash and runway
Cash, net burn and runway, with the burn basis, the window and the one-offs named.
Step 4: Variances
The flagged lines only, each with one sentence of why and what's being done.
Step 5: The 13-week low point
The lowest week, and anything that has to happen before it.
Step 6: Metrics, defined
Each with its formula, period and basis. A metric changed since last month is marked.
Step 7: Decisions asked for
Hires, fundraising, anything that needs a vote.
A pack is trusted when its numbers can be rebuilt from the books and every metric says what it is. Nobody remembers the design.
Wrong
Burn: (6,552.60) ↓ (green arrow)
Right
Net burn 24,647.40 (September; all cash out less customer receipts; excludes financing; includes $31,200 of one-offs, listed)
The left side is a slide. The right side is a number someone can check, and the next question it answers is already written down.
Monthly
- Good at
- Problems surface while they're small
- Forces a monthly close
- Watch for
Needs a fast, reliable close
- Best for
- Pre-seed through Series A, and any company with a short runway
Quarterly
- Good at
- Less work
- Lines up with board meetings
- Watch for
A bad month can be ninety days old before the board sees it
- Best for
- Later companies with a stable plan, alongside a monthly flash
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Background reading explains; it is never the authority for a rule. Anything marked as a convention is ours, not the rule-maker's.
- SEC
- SEC Release 33-10751 (January 2020) — Commission Guidance on MD&A: key performance indicators (opens in a new tab)A metric needs its definition, its calculation and why it is usedPDF · Free to read
- SEC Release 33-8176 — Regulation G, 17 CFR 244.100(a)(2); Item 10(e) of Regulation S-K (opens in a new tab)Non-GAAP financial measures must be reconciled to the GAAP measureFree to read
- Background reading — not an authority
- Wikipedia, “Board of directors” (opens in a new tab)The board of directors — backgroundFree to read
The full map is in US GAAP, and where these rules come from.
The words this lesson teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Board packThe set of statements, metrics and commentary delivered to the board or investors each month or quarter: the three statements, cash and runway, budget variances with explanations, and each metric with its definition, period and basisConvention
- CloseThe process of finalizing a periodConvention
- Non-GAAP financial measureA numerical measure of performance, position or cash flow that adjusts a GAAP figure — EBITDA, free cash flow, adjusted net income. A registrant publishing one must reconcile it to the most comparable GAAP measure
- VarianceActual less budget (or forecast) for one line, labeled favorable or unfavorable by the line's polarity: revenue above plan is favorable, a cost above plan is not. The sign is arithmetic; the label is the findingConvention
- RunwayRunway is a cash and runway metric, calculated as Cash ÷ net monthly burn.Convention
- Net burnNet burn is a cash and runway metric, calculated as Gross burn − cash in, excluding financing inflows.
- Run rateOne period's figure with named one-offs removed, as a measure of what a normal period looks like — run-rate burn, run-rate revenue. Always shown beside the reported figure, with the one-offs listedConvention
In the founder glossary
This lesson’s ideas, explained for the founder running the company. Each has an entry in the founder glossary.
See also
- Metric definitionsEvery metric in this system ships with its formula, period, inputs and source. A KPI without a definition is a number people argue about in meetings.
- Metrics & analysisMetrics & analysis — specs for 13 React components: MetricDefinition, NonGaapReconciliation, MrrBridge, BudgetVsActual and 9 more.
- Periods & the closeThe month-end close in accounting software: fiscal calendars, period states, cutoff, reconciliation vs tie-out, adjusting entries and restatement.
- Free cash flow calculatorFree cash flow is a cash and runway metric, calculated as Operating cash flow − Capital expenditures.
- Working capital calculatorWorking capital is a liquidity and working-capital metric, calculated as Current assets − Current liabilities.
- Current ratio calculatorCurrent ratio is a liquidity and working-capital metric, calculated as Current assets ÷ Current liabilities.
- Why startups should close their books every monthA monthly close turns a bank balance into numbers an investor, an auditor or a 409A firm will accept. What it is, and why it gets expensive to skip.
- Audit-ready books before your Series AInvestors, lenders and auditors ask for the same things: accrual statements, reconciled accounts and support for every balance. How to be ready first.
- MaterialityWhether an amount or an error is big enough, or important enough, to change what a reasonable reader of your statements would decide.
- ReportingPackageA board or lender pack as one object: contents, basis, review state.
- ReportHeaderEntity, statement, period, basis, currency, as-of. Every figure states its basis.
- KpiRow2–4 KPI cards with aligned baselines.
- MetricDefinitionEvery metric requires one. Formula with values substituted.
- KpiHealthStripProvisional marking for pre-close numbers.
- BudgetVsActualPolarity-aware, materiality-filtered, versions tracked.
- NonGaapReconciliationEBITDA below net income, every adjustment named.