One of the most critical aspects of SaaS financial management is having clear and distinct revenue streams. A well-structured SaaS P&L provides fundamental data for analyzing margins, operational efficiency, and business health. However, many SaaS companies do a poor job of clearly defining their revenue streams. This has major impacts on how you manage your […]
Revenue
- Due Diligence
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Understanding Contracted Annual Recurring Revenue: A Comprehensive Guide
Contracted Annual Recurring Revenue (CARR) was an obscure metric in the SaaS world years ago. Today, it’s become a hot and controversial SaaS metric when discussing company growth and SaaS valuations. CARR is a forward-looking SaaS revenue metric that estimates the maximum revenue size of a SaaS company. CARR combines two important aspects of revenue: […]
Bookings vs Invoicing vs Revenue | The SaaS Revenue Cycle Explained
The SaaS revenue cycle all starts with bookings. But what is a booking? And how does a booking differ from invoicing and revenue? SaaS is full of metrics, but in this case, we are mixing SaaS and accounting terminology to make things even more confusing. In this post, I will explain the differences among a […]
SaaS Revenue Waterfall Chart
SaaS Revenue Waterfall Chart Ugh, Budget Season! For most of us, we are beginning budget season or we are in the midst of budget season spending crazy hours manipulating numbers, building models, and meeting with department heads to create a workable first draft of the budget. I won’t dive into the pro’s and con’s of […]
SaaS Revenue Forecast Model
SaaS Revenue Forecast Model I try to keep my financial statement models as simple as possible. I don’t forecast on one tab, but I also don’t have 30+ tabs of assumptions and formulas. I build my models around the operations of the business and the important metrics. Enough detail to be accurate and supportable but […]