# Run rate and one-offs

> September's van and annual insurance, named and taken out: the run-rate burn beside the reported one.

Source: https://lopifi.com/learn/how-to-calculate-burn-rate-and-runway/run-rate-and-one-offs
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**What is run-rate burn, and how do I handle one-off costs in runway?** September's van and annual insurance, named and taken out: the run-rate burn beside the reported one.

By September's own burn, Northwind has 1.4 months. September was a first month: it bought the van outright and paid a year of insurance up front. Neither repeats next month at that size. Take them out, name them, and you have the [run rate](https://lopifi.com/md/glossary/run-rate): what a normal month looks like.

|  | Amount |
| --- | --- |
| Net burn, as reported | 24,647.40 |
| Less: The van, bought outright (JE-2) | (24,000) |
| Less: Twelve months of insurance, paid up front (JE-3) | (7,200) |
| Run-rate net burn | (6,552.60) |
| Runway at the run rate | no end in sight |

The one-offs, named. Each is read off the entry that made it.

*[Figure: burn runway]*

September with the van and the insurance taken out: the same cash in, a smaller gross burn.

The run-rate figure is negative: a normal month, on September's pattern, would add cash rather than burn it. That's too kind in its own way, because September's supplier bill wasn't fully paid and October will pay the rest. The run rate tells you the shape of a normal month. The [13-week cash flow](https://lopifi.com/md/learn/13-week-cash-flow-forecast) tells you what the bank will actually do.

**Wrong:** "We burn (6,552.60) a month."
(One-offs quietly removed; no reported figure shown.)

**Right:** Net burn 24,647.40 (September, as reported)
Run-rate net burn (6,552.60), after the van and the insurance

Dropping the one-offs without naming them is the same mistake as leaving them in, pointed the other way. Show both figures and the list between them.

## Where this page's rules come from

- [Wikipedia, “Burn rate”](https://en.wikipedia.org/wiki/Burn_rate) — Burn rate — background (reference)

## Read further

- https://lopifi.com/md/startups/burn-rate-and-runway
- https://lopifi.com/md/accounting/burn-rate

- **Track:** [Finance](https://lopifi.com/md/learn/finance)
- **Part of:** [Burn rate and runway, from the bank](https://lopifi.com/md/learn/how-to-calculate-burn-rate-and-runway) — 5 min
- **Terms taught:** [Run rate](https://lopifi.com/md/glossary/run-rate), [Net burn](https://lopifi.com/md/glossary/net-burn), [Capital expenditure](https://lopifi.com/md/glossary/capital-expenditure), [Prepaid expense](https://lopifi.com/md/glossary/prepaid-expense)
- **Previous:** [Burn rate and runway, from the bank](https://lopifi.com/md/learn/how-to-calculate-burn-rate-and-runway)
- **Next:** [Default alive or default dead, Finance · Lesson 2](https://lopifi.com/md/learn/default-alive-or-default-dead)
- **The course:** https://lopifi.com/md/learn