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Key Revenue Metrics for SaaS companies

The Angel VC

I’m not referring to sophisticated reports or analyses but to the much more mundane question of what exactly people mean when they use a term like “revenues”. That said, I believe most SaaS companies can focus on a small number of revenue metrics which aren’t overly complicated. Say you’ve acquired two new customers.

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How to calculate LTV for Shopify Partner Apps

Baremetrics

The lifetime value of a customer is just that—the total amount of revenue earned by the average customer during the duration of their contract. Baremetrics is a business metrics tool that provides 26 metrics about your business, such as MRR, ARR, LTV, ARPU, churn, total customers, and more. LTV = ARPU × Customer Lifetime.

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Earned and Incurred Accounting: What’s the difference?

Baremetrics

Let’s take a look at incurred revenue, earned revenue, and all the related accounting principles. Baremetrics can help you keep track of your growing business by providing 26 metrics about your business: MRR, ARR, LTV, total customers, etc. Revenue is defined as earned based on the “revenue recognition principle”.

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What Is Accrual Accounting?

Baremetrics

In cash accounting, you record all revenue and expenses when the cash enters and exits your checking account, respectively. However, many tax authorities require certain kinds of companies, as well as those over a revenue threshold, to switch to the accrual accounting method. Accrual Accounting for a SaaS Business Conclusion.

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What is Customer Acquisition Cost? A detailed guide

CustomerSuccessBox

CAC is an important metric for growing businesses to determine profitability and efficiency. An average SaaS business spends 92% of their first-year revenue on customer acquisition. Say in the month of August, your marketing costs were around $6000 and $2000 was spent on sales. Let us look at an example here.

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Cash Accounting

Baremetrics

In its simplest form, cash accounting is a system in which a company records expenses and revenues as the money changes hands. Unlike cash accounting, accrual accounting recognizes revenues and expenses as they are posted using accounts receivable and accounts payable journal entries. Cash Accounting Advantages and Disadvantages 1.

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How SaaS Companies Can Calculate (and Reduce) Their CAC Payback Period

FastSpring

If your CAC Payback Period is six months, but all your customers are churning after two, it’s safe to say your business isn’t going to survive long. For example, if your customers aren’t churning, but your CAC Payback Period is 24 months, you may want to look at trying to lower your CAC. Let’s use an example.