Digital Purchase Order Software Break-Even: Month 26 Plan

Fixed costs $55.4K/mo Base burn

Contribution margin 80%-84.3% After variable costs

Break-even revenue $69.2K/mo Monthly target

Break-even timing Month 26 Model crossover

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs to see where this software business breaks even.

Lean Base Full

Monthly revenue Revenue sets the pool that covers variable costs and fixed costs. $ Low sales High sales Variable expenses These are direct costs that move with sales, like hosting, fees, and commissions. $ Low direct High direct

Money available to cover fixed costs $151,545 $184,583 revenue - $33,038 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your gross profit must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which expenses are fixed, and which move with sales in this purchase order software model?

Cost classification

Break-even is only reliable when each expense matches how it behaves. Here, revenue-linked fees reduce contribution margin, while fixed overhead and step-up payroll set the monthly revenue floor.

Expense	Cost	Break-Even Treatment	Common Mistake
Cloud Hosting and Infrastructure	Variable	Model as 8.0% of revenue in the first year, falling to 6.0% by the mature year.	Treating usage as flat when customer activity grows.
Third-Party API Integration Fees	Variable	Model as 4.0% of revenue in the first year, falling to 2.0% by the mature year.	Ignoring integration volume as paid accounts expand.
Payment Processing Fees	Variable	Deduct 3.0% of revenue in the first year, easing to 2.7% by the mature year.	Leaving processing fees out of contribution margin.
Sales Commissions	Variable	Deduct 5.0% of revenue across the model period before calculating contribution.	Booking gross revenue as contribution.
Office Rent and Utilities	Fixed	Include $4,500 per month from Month 1 through Month 60.	Signing space before revenue proof.
Legal and Audit Retainers	Fixed	Include $2,000 per month as recurring overhead.	Treating recurring retainers as one-time setup spend.
Software Subscriptions CRM and HR	Fixed	Include $1,200 per month within the current planning range.	Dropping admin tools from monthly overhead.
Payroll Roles	Semi-fixed	Model staffing in steps, from about $45,000 per month in the first year to about $118,333 per month by the mature year.	Hiring ahead of paid customer growth.

How does break-even shift across lean, base, and full cases for digital purchase order software?

Scenario table

Here’s the quick math: higher conversion and a richer plan mix lower variable cost pressure, so break-even moves from a Year 1 loss to profit by Year 3 and a wider cushion by Year 5.

Planning assumptions only; actual results will move with churn, onboarding speed, and conversion.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$34.2k	$6.8k	$72.3k	80.0%	-$45.0k	Still below break-even; the model needs tighter hiring.
Base break-even case	$184.6k	$33.0k	$47.9k	82.1%	$103.7k	Break-even is already past Month 26, so the cushion has started.
Full scale case	$615.8k	$96.7k	$110.3k	84.3%	$408.8k	Strong cushion, but support and onboarding must keep pace.

What pushes this purchase order software past break-even, and where does the plan crack first?

Stress test

Base break-even is about $817k in monthly revenue on $654k of fixed cost and an 80% contribution margin. The launch risk is simple: weaker trial flow, higher CAC, or more support and integration work can move that line up fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$817k	$0 gap	Base case is close to the line.
Revenue miss	Visitor-to-trial conversion slips to 3.5%.	$817k	$65k gap	A weak funnel leaves a monthly cash hole.
Fixed-cost rise	Monthly fixed costs rise by $100k.	$942k	$125k gap	Overhead creep adds $125k to the break-even line.
Margin squeeze	Variable expenses rise from 20% to 25% of revenue.	$871k	$54k gap	A 5-point fee or support jump lifts the hurdle.
Combined hit	Fixed costs rise by $100k and variable expenses rise to 25%.	$1,005k	$188k gap	Slow trials, CAC above $450, and delayed integrations can push break-even past $1.0m.

What should you verify before you add sales payroll, stage launch spend, or commit to more integrations?

Founder checklist

Do not add sales payroll, office spend, or extra integrations until buyers accept the $99, $249, and $599 plans and the $0, $500, and $2,500 setup fees. The model only works if demand grows fast enough to cover about $55.4K of fixed burn and the Month 25 cash trough.

1Demand Proof3.5% / 12.0%

Prove visitors will start free trials at 3.5% and trials will convert to paid at 12.0% before you add more sellers.

2Plan Pricing$99 / $249 / $599

Confirm real buyers will pay the Starter, Professional, and Enterprise monthly prices before you scale marketing.

3Setup Fees$0 / $500 / $2,500

Test one-time fee acceptance now, because the Professional and Enterprise plans rely on upfront cash to help early break-even.

4CAC Guardrail$450

Keep year-one customer acquisition cost near the $450 assumption, or paid growth will outrun margin before the funnel matures.

5Burn Load$55.4K/mo

Stage the $65K launch capex only after pipeline proof, because fixed burn is about $55.4K a month before marketing and that is why cash bottoms near Month 25.

6Support Ramp1→4 FTE

Do not add sales payroll before onboarding and support can keep up, since customer success grows from 1 FTE in the first year to 4 FTE by the mature year.