Billing data is where recurring-revenue metrics come from, and where revenue recognition starts.
This section covers the formulas behind MRR, ARR, churn, lifetime value and revenue retention with worked examples, and explains deferred revenue and the revenue recognition standards in plain language, with links to the standards themselves.
11 articles
Six ASC 606 revenue recognition examples, each walked through the five steps and closed with a schedule or journal entries: set-up fees, bundles, rebates, added seats and more.
10 min read
Gross revenue retention shows how much recurring revenue a group of customers still pays after downgrades and cancellations. Formula, worked example and real definitions.
10 min read
LTV in SaaS estimates the margin one customer brings before they cancel. Here is the simple formula, a worked example, a cohort-based alternative and the usual mistakes.
9 min read
ARR in SaaS is the yearly value of the subscriptions a company has on a given date. See what counts, when MRR × 12 misleads and how one contract produces four different numbers.
10 min read
No official average churn rate for SaaS exists. Here is what listed software companies disclose, how to put the figures on one scale, and how to build your own benchmark.
10 min read
SaaS revenue recognition spreads a subscription fee over the period of service, whatever the invoice says. Here are the five steps applied to one $27,000 contract.
10 min read
A deferred revenue journal entry records cash received before delivery as a liability. See both entries and a 12-month schedule for a $1,200 annual plan.
9 min read
The net revenue retention formula shows whether revenue from your existing customers grew or shrank over a period. Here is the calculation, with an eight-customer example.
9 min read
The monthly recurring revenue formula sums every paying customer's subscription fee, restated per month. See what to include, the five movements and a worked month.
9 min read
A SaaS churn rate divides what you lost in a period by what you had at the start. Here is the formula for customers and revenue, a worked month and the annual conversion.
9 min read
The ten SaaS metrics a subscription business tracks, from MRR to CAC payback, with a formula for each, one worked month and the reason no two companies define them alike.
10 min read
