Run a Runway Stress Test

Use this guide before hiring, committing to a large expense, extending payment terms, or assuming an important customer will pay on time.

Before you start

• Make sure enabled bank accounts represent the cash available to the business.
• Confirm the workspace has recent revenue and expense history.
• Use an Owner or Member account. Forecast runs and saved-scenario changes require write access.
• Define one decision and one downside. A useful test answers a specific question.

Examples:

• Can we add two hires next quarter?
• What happens if our largest invoices arrive 30 days late?
• Can cash absorb a six-month revenue decline and cost increase?

1. Open Forecast

1. Select Finances.
2. Select Forecast.
3. Choose a horizon:
   • 6 months for immediate liquidity
   • 12 months for an operating plan
   • 24 months for longer commitments

The page calculates a no-driver baseline automatically.

2. Confirm the baseline

Before adding assumptions, review:

• Ending cash
• Minimum balance
• Runway P50, P10, and P90
• Cash-negative odds
• the Scenario cash trajectory

With no active assumption, Active plan should describe the current baseline and Active assumptions should say the model is showing the baseline.

If the chart says Not enough history to forecast, stop and repair the source data before using the test.

3. Apply a severe downside

Under Quick presets, select Severe stress test.

The preset replaces the current lever set with:

• 30% revenue drop
• 20% expense increase
• 30-day collections delay
• six-month duration for the revenue and expense shocks

Verify Assumptions active lists each change. If your decision is narrower, use the grouped levers instead:

• Revenue for revenue shock, growth, or client cancellations
• Team for headcount and loaded monthly cost
• Spend for expense surge or a dated one-time expense
• Timing for collections delay, acceleration, or recovery rate
• FX for foreign-currency sensitivity

4. Read downside risk

Start with Forecast answer:

• a positive-cash headline means the median stays above zero for the selected horizon
• a named breach month means median cash turns negative then

Next review:

1. Runway P10 for the conservative outcome.
2. Runway P50 for the median outcome.
3. Runway P90 for the more favorable outcome.
4. Cash-negative odds for the chance that any month goes below zero.
5. Pressure starts and Worst month.

Risk badges use these breakpoints:

• Low risk: less than 10%
• Moderate risk: 10% to less than 25%
• High risk: 25% to less than 50%
• Critical risk: 50% or more

A runway label such as >24 mo means no breach inside the 24-month horizon. It does not establish what happens after month 24.

5. Compare plans

In Scenario comparison matrix, compare:

• Baseline
• Active plan
• Defensive plan

Review ending cash, minimum cash, runway, cash-negative odds, and net impact using the same horizon and currency.

Use Cash runway decision timeline and Cash pressure by month to find when the scenario moves from Stable to Watch, High, or Critical.

Do not approve a decision based only on P50. The P10 runway and cash-negative probability expose tail risk that the median can hide.

6. Test the response

Change one controllable assumption at a time. For example:

1. Apply Severe stress test.
2. Reduce Expense surge or use the Defensive cost plan.
3. Compare the new ending cash and first pressure month.
4. Reset that change.
5. Test Collections acceleration or Recovery rate change.

The workbench refreshes after each adjustment. There is no separate run button for the live, unsaved scenario.

7. Save the decision case

1. Confirm at least one assumption is active.
2. Under Saved scenarios, select Save current.
3. Name the scenario for the decision, such as “Q4 hiring downside.”
4. Select Save.
5. In the saved row, select Run to recalculate it against the latest history and populate its latest summary.

Use Load to restore a saved definition. Use Delete only when the scenario should be permanently removed.

Success criteria

A decision-ready runway test has:

• one clearly stated business decision
• a verified no-driver baseline
• explicit assumptions with amounts, dates, percentages, and timing
• the same horizon and currency across comparisons
• P10, P50, P90, and cash-negative odds reviewed
• a known first pressure month
• a mitigation case compared with the downside
• a saved, named definition when the team needs to revisit it

Keep it separate from other finance records

• A stress scenario does not change observed transactions or balances.
• It does not create a monthly budget.
• It does not update invoice status.
• It is not an invoice insight report.
• It is not a public snapshot. Copying the URL preserves lever state, but recipients still need workspace and Forecast access.

Troubleshooting

Forecasting is not enabled

Confirm workspace access and use an Owner or Member account. The page uses the same unavailable message for a forbidden forecast request.

Cash starts at zero

Check Settings → Account → Bank Connections. Starting cash is calculated from enabled accounts in the forecast currency.

One-time expense is ignored

Enter both a positive amount and a valid date. Either value by itself does not create an active driver.

FX shock is ignored

Enter a three-letter currency and nonzero shock. The workspace also needs enabled-account exposure in that currency for the model to estimate an effect.

Saved scenario still says not run yet

Saving stores the definition. Select Run on the saved row to calculate its latest result summary.

Related pages

• Stress Tests
• Build and Review a Forecast
• Budgets and Forecast
• Financial Overview
• Weekly CFO Review