Guide to Churn and Retention Metrics You’ve often heard that churn is a company killer for SaaS and subscription businesses. To be more specific, high customer churn and long CAC payback periods will most definitely burn through your cash and ultimately lead to the demise of your business. Therefore, it’s critical to track, monitor and […]
Guide to SaaS Revenue Recognition and Deferred Revenue in SaaS
SaaS revenue recognition is an ongoing priority for SaaS accounting teams. Software subscriptions are the life of every SaaS business and must be accounted for properly in your general ledger. However, most SaaS companies I have spoken with are incorrectly recording their most important revenue stream. That is SaaS subscription revenue and the corresponding deferred […]
Simple Sales Efficiency Metrics for SaaS Leaders
I have spent years forecasting software and SaaS company financials. One area of the P&L that receives extra scrutiny from leadership and investors is the sales and marketing area. It’s easy to get lost in a sea of SaaS metrics, but in this post, I’ll focus on a couple easy and popular (meaning important) SaaS […]
When Do You Need an Investor Teaser Template?
When Do You Need an Investor Teaser Template? If you are looking for funding or need and an easy way to respond to serious private equity inquiries, then an investor teaser template should be ready to go on your shared drive. This free PowerPoint template (download below) is based on a real-life teaser document and […]
What is Monthly Recurring Revenue in SaaS?
Guide to Monthly Recurring Revenue (MRR) There is no shortage of terms and acronyms in SaaS, and monthly recurring revenue (MRR) is one of them. SaaS revenue terms can be quite confusing, especially around recurring revenue. Is it MRR, ARR, ARPA, revenue recognition or bookings? In this post, I’ll define monthly recurring revenue, its many […]
Sample Chart of Accounts in SaaS
Sample Chart of Accounts for SaaS I’ve received quite a few requests about a sample chart of accounts for SaaS, so let’s address a super critical component of your accounting. Not a “fun” topic per se, but you need to understand the concept behind your chart of accounts and implement the correct structure if you […]
Five Year Financial Projection Template
Five Year Financial Projection Template – Solving My Pain Creating a five-year financial projection or any long-term financial forecast greater than two years is a time intensive effort. You need to add X number of managers per staff, you need enough sales reps to support bookings, you need more technical support specialists as your customer […]
How to Prepare for M&A Management Presentations
Management Presentations in M&A Due Diligence The banker said to block my calendar for management presentations. Excuse me, what are management presentations? And for two weeks? Yes, and this is only the halfway point. The real “fun” in due diligence comes after the management presentations. However, before we get too far, let’s break down what […]
What is Net Negative Churn in SaaS
Net negative churn occurs when your expansion revenue from existing customers totals more than your lost revenue from existing customers. This SaaS metric does not factor in any revenue from new customers, just existing customers. As Nathan Latka puts it in his “The Top” podcast, this is the holy grail of SaaS. Your recurring revenue […]
SaaS Accounting Tips for Founders
SaaS Accounting Tips SaaS accounting is probably not every SaaS founder’s favorite topic. However, as you scale, it is critical that you implement an accounting framework that will provide you and your team the necessary data to manage your business. In this post, I offer several actionable SaaS accounting tips for founders and their accounting […]