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The Encyclopedia of Subscription & SaaS Finance Terms and Metrics

There can be significant confusion over the term ARR, its use and the measurement of ARR because it feels and sounds like a measure of “revenue” in the context of revenue recognition. However, ARR is not necessarily a measure of recognized revenue.

See Subscription Financials in One Place

MRR is an acronym for Monthly Recurring Revenue or, very simply, a measure of your predictable revenue stream. The primary purpose of MRR is to permit performance reporting across dissimilar subscriptions terms.

Gain quick and easy access to New, Expansion, and Churn MRR 

Customer lifetime value, also referred to as LTV and CLV, is the estimate of the projection of gross margin contribution per customer over the life of the average customer.

Always know your CLV:CAC Ratio

While there are many variations of churn, churn is always a measure of attrition or loss, and it can be lost customers, contracts, MRR, GAAP revenue, contract value or bookings.

Know your Logo & Revenue Churn 

Renewal rate is a measure of retention. Renewal rate is expressed as a percentage and can mean different things to different people.

Ensure Renewals Happen Daily

Revenue Recognition is an accounting principle and a process for reporting revenues by recognizing the monetary value of a transaction or contract over a period of time as the revenue is “earned.”

See Rev Rec across the Customer Lifecycle

You manage cash flow, but "finance" is left to the accountant that prepares your taxes. If this is you, read on and be sure to watch the essential finance concepts video.

Get B2B SaaS subscription management with SaaSOptics and scale financial operations.

Overview Video

1 Minute of Executive Summary, 1 Minute of Process, and 5 Minutes of Screens.

What Customers Say:

Check out our CEO Guide to SaaS Metrics:

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Know the metrics you need to track and why.

Check out our Podcast where we breakdown the saas metrics that matter

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