Australian service-business cash runway: reconciling Xero with CDR bank evidence

An accounting connection can show invoices issued, bills recorded, revenue, expenses and available account balances. Those records explain what the books say happened and what has been recognised, but an invoice is not the same thing as cash received and a recorded bill is not always paid on its entry date.

A consent-bound banking connection can show available bank accounts, balances and transactions when the institution, account and deployed connector support them. That evidence is closer to observed cash movement, but it does not automatically know the accounting classification, whether a transfer is internal, or whether every business account is included.

Service businesses often invoice before payment, carry work in progress, collect deposits, pay contractors at different intervals and face payroll or tax outflows that do not line up neatly with recognised monthly revenue. A profit result can therefore coexist with a short cash runway.

Start with the legal entity and the bank accounts that belong to the business. Align the accounting period and the bank as-of timestamp. Match transfers, payments and receipts where the evidence supports it, then identify unexplained differences instead of forcing the sources to agree.

Use observed available cash for the starting balance. Build monthly cash inflows and outflows from a consistent recent period, separating internal transfers and one-off movements that would distort the recurring run rate. Keep committed but not-yet-paid obligations visible as a scenario adjustment rather than pretending they have already left the bank.

The canonical cash-runway calculation uses current cash divided by positive net monthly burn. When inflows cover the entered outflows, it reports that there is no depletion at that run rate instead of manufacturing an infinite month count. The result remains a scenario, because future collections and spending can change.

The Australian Government describes CDR as a way for a consumer or business to choose to share data with an accredited third party. MarginKoala’s connector definition is read-only and consent-bound; it does not initiate payments or change bank data.

Tax and GST treatment are not inferred from a bank description or connector category. Use the accounting basis approved for the business and obtain professional advice where classification changes the decision. The purpose of this workflow is evidence reconciliation, not tax determination.