FinOps & process
Run-rate
Current spend annualized (or projected to month-end) as if the recent pace continued unchanged: a quick, if naive, forward-looking number.
Last updated
Definition
Run-rate takes a recent, representative period of spend and extrapolates it forward at the same pace: a common shorthand is "current monthly spend × 12" for an annualized figure. It's useful precisely because it's fast to compute and easy to communicate, which makes it the default starting point for forecasting and budget conversations.
Its weakness is the same as its strength: it assumes the recent pace is representative, which breaks down around known step-changes (a new commitment kicking in, a planned feature launch, seasonal usage swings) that a naive run-rate can't see coming.
Where it shows up
Run-rate is a simple computed figure, usually current monthly spend multiplied by twelve for an annualized number, pulled straight from a billing console's own monthly total figure with no separate forecasting tool required to produce it or explain how the number was reached in the first place.
What makes it expensive
Run-rate assumes next month looks like this one. Around a known step-change, a commitment kicking in or a feature launch already scheduled, it plainly will not, and a naive extrapolation cannot see any of that coming. The fix is not a better formula. It is asking what is already on the calendar.
Related
The invoice is a lagging signal.
A monthly invoice tells you what already happened. CostMon builds a daily baseline, so a spike stands out while you can still act on it.