SaaS · 🇳🇿 New Zealand
Eleven months of runway, reported as eighteen
An Auckland SaaS founder was raising against a runway model that excluded provisional tax and annualised a seasonal revenue peak.
New Zealand SaaS, 9 staff, pre-Series A. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
7 months
Runway overstatement corrected
NZ$61k
Provisional tax surfaced
4 weeks
To board-ready reporting
The situation
- The founder was preparing to raise and modelling runway in a spreadsheet built during the seed round.
- Revenue had grown sharply, which the model treated as good news without considering the tax consequence.
What we found
- Provisional tax instalments were sized on the prior year's much smaller liability, leaving roughly NZ$61,000 unprovided and use-of-money interest accruing.
- The runway model annualised a seasonal peak month, overstating monthly recurring revenue.
- Deferred revenue was not separated, so cash received for annual contracts was being read as earned.
What we did
- Rebuilt the model with deferred revenue separated and provisional tax provided across the 28 August, 15 January and 7 May instalments.
- Moved to a rolling thirteen-week cash forecast reviewed monthly.
- Produced a board pack tying the management accounts to the forecast, so the two could not drift apart again.
The outcome
- Real runway was eleven months, not eighteen. The founder brought the raise forward by a quarter and went into it with numbers that survived investor scrutiny.
- Provisional tax has been provided correctly since, and use-of-money interest stopped accruing.
What we'd flag
This was unwelcome news delivered at a bad time. The value was in finding it before an investor did, not in it being pleasant.
Answers
Eleven months of runway, reported as eighteen
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