# 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.

Source: https://lopifi.com/learn/monthly-board-pack
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**What should a startup's monthly board or investor reporting package include?** 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](https://lopifi.com/md/glossary/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.

*[Figure: month end close]*

Illustrative: the pack is built on a closed month. Nothing goes in it before the close is signed off.

1. **The headline.** One paragraph: what happened, what changed, what you need from the board.
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.
3. **Cash and runway.** Cash, net burn and runway, with the burn basis, the window and the one-offs named.
4. **Variances.** The flagged lines only, each with one sentence of why and what's being done.
5. **The 13-week low point.** The lowest week, and anything that has to happen before it.
6. **Metrics, defined.** Each with its formula, period and basis. A metric changed since last month is marked.
7. **Decisions asked for.** Hires, fundraising, anything that needs a vote.

Northwind's September pack, in order.

| Metric | Value | Definition and basis |
| --- | --- | --- |
| Cash | 35,352.60 | Ledger balance at September 30, reconciled to the bank |
| Net burn | 24,647.40 | All cash out less customer cash in, excluding financing; September only |
| Run-rate net burn | (6,552.60) | Net burn less the van and the annual insurance, named |
| Runway | 1.4 months | Cash ÷ September net burn, one-offs included |
| Revenue against budget | (2,500) | U: actual less the August budget |
| Gross margin | 46.0% | (Revenue − cost of revenue) ÷ revenue, accrual basis |
| 13-week low point | 17,860 | Week 5, base case, no growth assumed |

September's numbers, as they go in the pack. Each states its basis.

> “A clear definition of the metric and how it is calculated; A statement indicating the reasons why the metric provides useful information to investors; and A statement indicating how management uses the metric in managing or monitoring the performance of the business.”

— [SEC Release 33-10751 (January 2020) — Commission Guidance on MD&A: key performance indicators](https://www.sec.gov/rules/interp/2020/33-10751.pdf) (PDF), A metric needs its definition, its calculation and why it is used

> **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**
- Pro: Problems surface while they're small
- Pro: Forces a monthly close
- Con: Needs a fast, reliable close
- Best for: Pre-seed through Series A, and any company with a short runway

**Quarterly**
- Pro: Less work
- Pro: Lines up with board meetings
- Con: 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

How often.

**Northwind — The headline paragraph.** "September, our first month: revenue $31,500, $2,500 below budget on slower walk-in trade. Profit $1,747.40. Cash $35,352.60 after buying the van outright. The 13-week forecast's low point is $17,860. We're asking the board to approve one hire now and the second when monthly growth holds at 10%."

> **Provisional numbers.** A metric computed before the bank is reconciled or the month is closed is an estimate. Mark it provisional, or leave it out. Correcting a figure the board has already quoted costs more trust than sending the pack two days later.

## Where this lesson's rules come from

- [SEC Release 33-10751 (January 2020) — Commission Guidance on MD&A: key performance indicators](https://www.sec.gov/rules/interp/2020/33-10751.pdf) (PDF) — A metric needs its definition, its calculation and why it is used (sec)
- [Wikipedia, “Board of directors”](https://en.wikipedia.org/wiki/Board_of_directors) — The board of directors — background (reference)
- [SEC Release 33-8176 — Regulation G, 17 CFR 244.100(a)(2); Item 10(e) of Regulation S-K](https://www.sec.gov/rule-release/33-8176) — Non-GAAP financial measures must be reconciled to the GAAP measure (sec)

## Read further

- https://lopifi.com/md/calculators/free-cash-flow
- https://lopifi.com/md/calculators/working-capital
- https://lopifi.com/md/calculators/current-ratio
- https://lopifi.com/md/startups/why-close-your-books-monthly
- https://lopifi.com/md/startups/audit-ready-books-before-series-a
- https://lopifi.com/md/accounting/close
- https://lopifi.com/md/accounting/runway
- https://lopifi.com/md/accounting/burn-rate
- https://lopifi.com/md/accounting/materiality
- https://lopifi.com/md/docs/domain/10-metrics
- https://lopifi.com/md/docs/catalog/13-metrics-and-analysis
- https://lopifi.com/md/docs/domain/02-periods-and-close

- **Track:** [Finance](https://lopifi.com/md/learn/finance)
- **Lesson:** Lesson 8 of 8 — 10 min
- **Terms taught:** [Board pack](https://lopifi.com/md/glossary/board-pack), [Close](https://lopifi.com/md/glossary/close), [Non-GAAP financial measure](https://lopifi.com/md/glossary/non-gaap-financial-measure), [Variance](https://lopifi.com/md/glossary/variance), [Runway](https://lopifi.com/md/glossary/runway), [Net burn](https://lopifi.com/md/glossary/net-burn), [Run rate](https://lopifi.com/md/glossary/run-rate)
- **Previous:** [How a raise changes runway, Finance · Lesson 7](https://lopifi.com/md/learn/how-a-raise-changes-runway)
- **Next:** [Founder stock, vesting and the 83(b) election, Cap table · Lesson 1](https://lopifi.com/md/learn/founder-stock-and-vesting)
- **The course:** https://lopifi.com/md/learn