SaaS Metrics School
Episodes
Don’t Comingle Your Revenue Streams
23 Jan 2024
Contributed by Lukas
In episode #164, I address an important topic that has come up a lot lately. The clarity and definition of your revenue streams. Don’t comingle them...
The Big Bucket of Expenses and Running Financially Blind
19 Jan 2024
Contributed by Lukas
In episode #163, I address a common financial setup mistake that prevents you from making informed financial decisions. - Big bucket of expenses - Fin...
The Advisors You Need When Selling Your Company
13 Jan 2024
Contributed by Lukas
In episode #162, I address the advisors you need when exiting. Don’t go it alone! Transactions are very complicated. - Investment Banker - Tax CPA -...
I Need at Least 3 Months to Prep Your Metrics for Due Diligence
12 Jan 2024
Contributed by Lukas
In episode #161, I address the time needed to accurately prepare your SaaS metrics. I talk to many founders who have kicked off an informal exit proce...
VC Fundable Growth Rates
11 Jan 2024
Contributed by Lukas
In episode #160, I review growth rates that are considered VC fundable. I find growth rates to be very subjective based on the audience. Are we talkin...
How to Handle Unknown Churn in Your Reporting
08 Jan 2024
Contributed by Lukas
Episode 159 – How to Handle Unknown Churn in Your Reporting In episode #159, I address a reader's question. This is very common for SaaS companies t...
The Ultimate SaaS CFO KPI Checklist
04 Jan 2024
Contributed by Lukas
In episode #158, I share my SaaS CFO KPI checklist. I'm holding a free training on this checklist on Jan 17. Register at the link below. - M...
You Need Bookings Alignment with Your Forecast
02 Jan 2024
Contributed by Lukas
In episode #157, I address bookings and budgets or forecasts. You really cannot create a proper forecast or budget without bookings targets. This is s...
Do I Need an “Operational” CFO for My Company?
30 Dec 2023
Contributed by Lukas
In episode #155, I address an article in CFO Dive about tech companies wanting operational CFO’s. - What is an operational CFO? - How does this help...
5 Drivers of SaaS Valuations per ICONIQ
29 Dec 2023
Contributed by Lukas
In episode #155, I address SaaS valuation drivers. Of course, a lot of opinions here but ICONIQ named their five value drivers based on the current ma...
Trends in Revenue per FTE According to ICONIQ and Lemkin
28 Dec 2023
Contributed by Lukas
In episode #154, I address the latest data points in revenue per FTE. ICONIQ Growth just published a great metrics report which times nicely with Jaso...
Bookings Data is one of the Biggest SaaS Data Mistakes
21 Dec 2023
Contributed by Lukas
In episode #153, I tackle bookings data. I see problems over and over in how SaaS companies track or don’t track bookings data. - New ARR - Expansio...
How to Unbundle Your COGS Expenses for Greater Margin Clarity
19 Dec 2023
Contributed by Lukas
In episode #152, I tackle a recurring theme in SaaS P&L and chart of accounts set ups. It’s your COGS, or cost of goods sold area. - Traditional...
Do I Really Need to Track Revenue on Daily Basis?
18 Dec 2023
Contributed by Lukas
In episode #151, I tackle a message that came in through my blog. This reader was tasked to develop a SaaS revenue model that would monitor and foreca...
Is Your First Quarter ARR Number Already Baked?
15 Dec 2023
Contributed by Lukas
In episode #150, I tackle another annual planning topic. The dance between your pipeline and your ARR commit number. Depending on your average sales c...
You’ve Got to Hit Your Q1 Budget Number
14 Dec 2023
Contributed by Lukas
In episode #149, I tackle an annual planning topic. The annual budget or operating plan is a bit of a dance. Like anything in finance, it’s a bit ar...
$1M or $100M ARR the Foundation of CAC is Still the Same
13 Dec 2023
Contributed by Lukas
In episode #148, I have the privilege of coaching SaaS businesses from large to small. The fundamental concept of SaaS metrics remains the same. We ma...
What is the Difference Between Retention Rates and Renewal Rates?
12 Dec 2023
Contributed by Lukas
In episode #147, I address the health of your recurring revenue. These metrics are a must-have for any recurring revenue business. - What is retention...
When Do I Count a Customer Cancellation?
10 Dec 2023
Contributed by Lukas
In episode #146, I address the timestamp on a customer cancellation. This is a very common question. Customer Success often tracks this differently th...
Is It Correct to Allocate Engineering Expense to COGS
09 Dec 2023
Contributed by Lukas
In episode #145, I address headcount allocations. It’s very common to allocate headcount expense in early-stage SaaS companies. But we have to suppo...
How to Track Pilot or Proof of Concept (POC) Revenue and Bookings
08 Dec 2023
Contributed by Lukas
In episode #144, I address pilot and POC revenue. It’s important to separate this from your “normal” customer revenue and bookings. - Bookings -...
How to Calculate Your Expansion ARR Target Based on Retention Targets
07 Dec 2023
Contributed by Lukas
In episode #144, I talk retention and ARR targets. My template and lesson below are very helpful for your Customer Success and Account Management team...
Should I Be Worried if I Have a 60% Gross Profit?
06 Dec 2023
Contributed by Lukas
In episode #142, I talk gross profit in SaaS. Gross profit or gross margin is a fundamental financial topic that every SaaS founder, CFO, and operator...
Revenue per FTE Trends for Public Companies per Meritech Capital
05 Dec 2023
Contributed by Lukas
In episode #141, I take a look at the latest SaaS public company trends. Today, let’s look at implied ARR per FTE trends. - ARR per FTE trends - Why...
Net Revenue Retention Trends for Public Companies per Meritech Capital
04 Dec 2023
Contributed by Lukas
In episode #140, I take a look at the latest SaaS public company trends. Today, let’s look at net revenue retention. - Public NRR trends - Private c...
The Key to Scaling is Your Org Efficiency and the ROSE Metric
03 Dec 2023
Contributed by Lukas
In episode #139, I address org efficiency and scaling. Eventually, you need good employee and contractor efficiency to reach profitability and improve...
Only 0.4% of SaaS Companies Pass 10M ARR per SaaStock
01 Dec 2023
Contributed by Lukas
In episode #138, I address the challenge of scaling past $10M in ARR. This is an interesting stat from SaaStock. There are so many business components...
A Common Financial Trait of EBITDA Positive SaaS Companies
30 Nov 2023
Contributed by Lukas
In episode #137, I address a common financial trait from my experience helping SaaS companies from the $3M ARR to $15M ARR range. It’s org efficienc...
ACV versus ARPA When Segmenting Your Customer Base
29 Nov 2023
Contributed by Lukas
In episode #136, I address the jargon of SaaS. ACV and ARPA are important concepts to understand and track in your business. What if legacy users on d...
Implement an Internal Discounting Policy for Better Pricing Controls
28 Nov 2023
Contributed by Lukas
In episode #135, I address a student question about software discounts. We love to discount software. Even back in my on-premise, perpetual days, we w...
Is My SaaS Company at a 3x or 10x ARR Valuation?
27 Nov 2023
Contributed by Lukas
In episode #134, I address SaaS valuations. You need to be roughly aware of where you fall in the valuation spectrum. This helps when you are speaking...
Coding Your Employee-related Expenses
25 Nov 2023
Contributed by Lukas
In episode #133, I address employee expense coding. Since our SaaS P&L is comprised of mostly employee expenses, we must code these correctly. - W...
Coding Your Contractor Expense
24 Nov 2023
Contributed by Lukas
In episode #132, I address contractor coding. It’s very common to use a lot of contractors in early stage companies. But we must code these expenses...
Behinds Scenes Look at the SaaS Revenue Cycle
23 Nov 2023
Contributed by Lukas
In episode #131, I address the CFO’s utopia of quote to cash. What really happens when we land a customer? - Bookings - Invoicing - Rev rec - Cash c...
Contract Dates versus Invoice Dates
22 Nov 2023
Contributed by Lukas
In episode #130, I address the world of dates in subscription businesses. Such simple data but often overlooked and not tracked. We need dates to driv...
Is Your Services Backlog in Months Increasing or Decreasing?
21 Nov 2023
Contributed by Lukas
In episode #129, I address the world of professional services metrics. Backlog in months is an important metrics for our services team. Calculating th...
Do You Have an FTE Report?
20 Nov 2023
Contributed by Lukas
In episode #128, I address the often-missing FTE report. This is a standard report that should be produced as part of your monthly close process. - Wh...
I’m Passing 5M in ARR What S&M Efficiency Metrics Should I Calculate?
18 Nov 2023
Contributed by Lukas
In episode #127, I address a common question in the progression of our SaaS metrics. As our SaaS business scales, we have to implement additional metr...
Do I Need Cohort Analysis for My Revenue Streams?
17 Nov 2023
Contributed by Lukas
In episode #126, I address cohort analysis and when this framework is the right fit for your SaaS business. - What is cohort analysis? - Basic cohort ...
73% of Your SaaS Peers Raised Their Prices in 2023
16 Nov 2023
Contributed by Lukas
In episode #125, I address an interesting report from Vertice.one on SaaS inflation. There is an art and science to increasing your prices. This fits ...
The 4 Pure Play SaaS COGS Departments
15 Nov 2023
Contributed by Lukas
In episode #124, I address the COGS, or Cost of Goods Sold, departments on your SaaS P&L. There are four common departments with pure play SaaS. -...
The 6 Possible Revenue Categories on Your SaaS P&L
14 Nov 2023
Contributed by Lukas
In episode #123, I address the major revenue categories in SaaS. It’s important to set this up correctly. It impacts how you manage your business an...
Can You Really Define ARR?
13 Nov 2023
Contributed by Lukas
In episode #122, I address a big metrics and sometimes a controversial metric. It’s your ARR. Can you really define your ARR? And is that definition...
Make Sure You Code Software Expenses Correctly
11 Nov 2023
Contributed by Lukas
In episode #121, I cover internal use software and software embedded in our SaaS app. It’s easy to confuse where this spend should be posted to our ...
What ARR Number Should We Use in ARR Multiples?
10 Nov 2023
Contributed by Lukas
In episode #120, I cover a somewhat debated topic on ARR. Of course, this is debated between buyers and sellers. If I’m trying to achieve a specific...
What is CARR and Why Do I Care?
09 Nov 2023
Contributed by Lukas
In episode #119, I cover committed annual recurring revenue (CARR). Yet, another SaaS metric. It can also be called contracted annual recurring revenu...
How to Calculate the Cost of Expansion ARR
08 Nov 2023
Contributed by Lukas
In episode #118, I cover an important sales and marketing efficiency metric, the Cost of ARR. As our GTM team scales, it usually splits into new busin...
Are You Tracking the Billable Utilization of Your Services Team?
07 Nov 2023
Contributed by Lukas
In episode #117, I provide an overview of the all-important utilization metric for professional services teams. Not calculating it? Then you don’t k...
Track Your Professional Services Backlog Number
06 Nov 2023
Contributed by Lukas
In episode #116, I provide an overview of professional services backlog in SaaS. Your professional services team play an important role in early custo...
What is Professional Services?
05 Nov 2023
Contributed by Lukas
In episode #115, I provide an overview of professional services in SaaS. Your professional services team plays an important role in early customer sat...
Do You Have Balance Between CAC Payback and Retention?
04 Nov 2023
Contributed by Lukas
In episode #114, I address the power of SaaS metrics in context. Two metrics that should be viewed together? CAC Payback Period and revenue retention....
The Perfect Storm for Cash Burn
03 Nov 2023
Contributed by Lukas
In episode #113, I address cash burn from the front lines. If you are still pivoting on product market fit, it can be very dangerous to scale your go-...
What Should Be Included in Your Dev Ops Expenses?
02 Nov 2023
Contributed by Lukas
In episode #112, I address Dev Ops expenses in our COGS area of the SaaS P&L. Let’s discuss the details of Dev Ops expenses. - hosting - 3rd par...
Human Powered vs Product Powered Revenue | You Gotta Get This Right
01 Nov 2023
Contributed by Lukas
In episode #111, I address human powered versus product powered revenue. It’s so important to categorize your revenue and COGS correctly on your P&a...
Top 5 Accounting Software for SaaS Companies
31 Oct 2023
Contributed by Lukas
In episode #110, I address the core system in our financial process, our accounting software. I am in the midst of my 5th annual tech stack survey. I’...
Levers to Pull in Sales Compensation Planning
30 Oct 2023
Contributed by Lukas
In episode #109, I address sales compensation planning and how you can design your plans for maximum effectiveness. QuotaPath joined me on a webinar t...
Should Downgrades Count Against My Booked ARR?
29 Oct 2023
Contributed by Lukas
In episode #109, I address bookings, downgrades, and reporting. We may or may not want to include downgrades in our net ARR number. This is an importa...
Am I Ready for Debt Financing to Fuel Growth?
28 Oct 2023
Contributed by Lukas
In episode #107, I address debt financing as a source of growth capital. Debt financing for SaaS companies is a hot space right now. We must assess fi...
I’ve Got My SaaS P&L Set Up | What’s Next?
27 Oct 2023
Contributed by Lukas
In episode #106, I address early stage financial infrastructure. I was just talking to a SaaS founder who spent some consulting money to properly conf...
High Growth High Confusion
26 Oct 2023
Contributed by Lukas
In episode #105, I address growing pains. If you are experiencing high growth, don’t let your financial infrastructure lapse. High growth can cause ...
Mind the Gap in Your Renewal Dates
25 Oct 2023
Contributed by Lukas
In episode #104, I address a common issue that wreaks havoc on your MRR schedule. And it will create pain for you in due diligence and retention repor...
Code Your Consultants and Contractors Separately
24 Oct 2023
Contributed by Lukas
In episode #103, I address consultant and contractor coding. It’s important to get this right in your chart of accounts. SaaS companies often supple...
What’s Lurking in Your G&A Expenses?
23 Oct 2023
Contributed by Lukas
In episode #102, I address a common dumping ground for expenses, your G&A cost center. There are many activities and roles within G&A. We must...
How Do I Handle Spikes in Sales and Marketing Expenses
22 Oct 2023
Contributed by Lukas
In episode #101, I address a common student question in my SaaS metrics course. We may have large spikes in S&M expenses due to events, conference...
How Do I Start Implementing SaaS Metrics?
21 Oct 2023
Contributed by Lukas
In episode #100, I thought it would be appropriate to address SaaS metrics at a high level. Where do I start with metrics? - Right metrics for the rig...
How to Really Determine What Should Be in COGS
20 Oct 2023
Contributed by Lukas
In episode #99, I address a very common question in SaaS finance. What should be included in COGS? It’s so important to get this right. If you don’...
Do You Include Sales Operations in S&M Expenses?
19 Oct 2023
Contributed by Lukas
In episode #98, I address the major functions that we see in Sales. Should these be coded to Sales or somewhere else? - Fully-burdened expenses - Comm...
What Churn % Should I Use for LTV
18 Oct 2023
Contributed by Lukas
In episode #97, I address churn and LTV. We think SaaS metrics are completely objective, but it is very easy to influence the result of a metrics calc...
CAC Calculation and Multiple GTM Strategies
17 Oct 2023
Contributed by Lukas
In episode #96, I address our core CAC calculation when we have different product lines and different go-to-market (GTM) strategies. We can’t ...
These are the 4 Source Data Inputs for SaaS Metrics
16 Oct 2023
Contributed by Lukas
In episode #95, I address the major data source we need to calculate the complete SaaS metrics picture. It’s important to have clean and repeatable ...
Have You Heard of the Dollar-based CAC Payback Period?
15 Oct 2023
Contributed by Lukas
In episode #94, I address a variation of the traditional CAC Payback Period. This is a great supplement to your traditional SaaS metrics. - What is CA...
What Metrics Should I Measure as I move from $2M ARR to $4M ARR
14 Oct 2023
Contributed by Lukas
In episode #93, I address a student question from my live SaaS metrics foundation course. This is a great question and one that must be answered by al...
What Should I Include in My Sales and Marketing Expenses?
13 Oct 2023
Contributed by Lukas
In episode #92, I address a student question from my SaaS metrics foundation course. It actually caught me off guard, because I talk a lot about fully...
How Much Should I Spend in S&M as a Percentage of Revenue?
12 Oct 2023
Contributed by Lukas
In episode #91, I address investments in the OpEx section of our SaaS P&L. We must monitor our spend in sales and marketing. We expect efficiency ...
How Much Should I Spend in G&A as a Percentage of Revenue?
11 Oct 2023
Contributed by Lukas
In episode #90, I address investments in the OpEx section of our SaaS P&L. We must monitor our spend in G&A. We expect efficiency over time in...
How Much Should I Spend in R&D as a Percentage of Revenue?
10 Oct 2023
Contributed by Lukas
In episode #89, I address investments in the OpEx section of our SaaS P&L. We must monitor our spend in R&D. We expect efficiency over time in...
What is the Ideal Revenue Mix for a Pure-play SaaS Valuation?
09 Oct 2023
Contributed by Lukas
In episode #88, I address revenue mix and one-time revenue when considering SaaS valuations. It your product requires professional services for custom...
What Advisors Do I Need as a First-time SaaS Founder?
08 Oct 2023
Contributed by Lukas
In episode #87, I address advisors and first-time SaaS founders. It’s important to have the right team from the beginning to avoid mistakes down the...
How Do We Count Expansion in Our Bookings Report and CRM?
07 Oct 2023
Contributed by Lukas
In episode #86, I address a student question in my SaaS Metrics Foundation course. ARR is the student’s new North Star metric. If we renew a custome...
What Month Do I Count Churn?
06 Oct 2023
Contributed by Lukas
In episode #85, I address churn tracking. Finance and Customer Success like to track churn dates differently. - What is churn? When the customer compl...
Should I Track ARR or TCV with Multi-year Contracts?
05 Oct 2023
Contributed by Lukas
In episode #84, I address the world of annual and multi-year contracts and reporting. We have to get this right for performance tracking and due dilig...
Be Careful with Your Coding of Reseller Revenue
04 Oct 2023
Contributed by Lukas
In episode #83, I address third-party resold items. In this case, you are reselling someone else’s product. You are doing this because it is probabl...
Should Price Increases Be Counted as Expansion?
03 Oct 2023
Contributed by Lukas
In episode #82, I address a question that is asked in every one of my live SaaS metrics courses. How do we count price increases? Should we count this...
Are Onboarding Expenses a COGS or Sales Cost?
02 Oct 2023
Contributed by Lukas
In episode #81, I address a common question on onboarding expenses. CAC stops at the time of customer acquisition. Should we also including onboarding...
Should I Code Bonuses to COGS or OpEx?
01 Oct 2023
Contributed by Lukas
In episode #80, I address bonus coding and accruals. Accurate coding of employee-related expenses is critical to an accurate SaaS P&L. - Where sho...
When Should I Implement the Rule of 40 Metric?
30 Sep 2023
Contributed by Lukas
Episode 79 – When Should I Implement the Rule of 40 Metric? In episode #79, I address the Rule of 40 metric. It’s back in style but many blog post...
What’s the Difference Between Tech Support and Customer Success
29 Sep 2023
Contributed by Lukas
Episode 78 – What’s the Difference Between Tech Support and Customer Success In episode #78, I address the blurring of COGS departments in early-s...
Don’t Record Discounts Separately from Your Subscription Revenue
28 Sep 2023
Contributed by Lukas
In episode #77, I address subscription revenue and discounts. This is a point I really hammer on in my SaaS metrics course. Your MRR schedule must be ...
Where Do I Code Platform Fees
27 Sep 2023
Contributed by Lukas
In episode #76, I address the platform fees. In some cases, SaaS companies build on top of other platforms. An example would be an app on ServiceNow. ...
Make Sure You Understand and Define What a Customer Means
26 Sep 2023
Contributed by Lukas
In episode #75, I address the definition of a customer. What’s your prize? This affects how you track data and can completely skew your metrics if d...
When Do You Need a Fractional CFO?
25 Sep 2023
Contributed by Lukas
In episode #74, I address the world of fractional help. I’ll focus on the CFO but also share other fractional roles that I see in SaaS companies wit...
Your CPA and Bookkeeper Need to Break Up
24 Sep 2023
Contributed by Lukas
Episode 73 – Your CPA and Bookkeeper Need to Break Up In episode #73, I address how your early-stage accounting team transitions. I see this over an...
How to Run Retention Analysis When You Have Two Revenue Streams
23 Sep 2023
Contributed by Lukas
Episode 72 – How to Run Retention Analysis When You Have Two Revenue Streams In episode #72, I dive into retention and revenue streams. It can be da...
How Do You Measure MRR When It’s Usage with No Minimums?
22 Sep 2023
Contributed by Lukas
Episode 71 – How Do You Measure MRR When It’s Usage with No Minimums? In episode #71, I dive into the wild world of variable revenue. It can be di...
What is Managed Services?
21 Sep 2023
Contributed by Lukas
In episode #70, I dive into services revenue. Managed services is not professional services and must be reported separately. What is managed services...
When Does a Renewal Become a Booking?
20 Sep 2023
Contributed by Lukas
In episode #69, I dive into bookings and renewals. Not all renewals are a software booking. But a software booking can come from a renewal. - What is ...
How Do We Track Usage that Exceeds Pricing Tiers?
19 Sep 2023
Contributed by Lukas
In episode #68, I dive into revenue reporting and variable revenue. If we offer subscription pricing tiers that cover usage levels, how do we track ex...
What Month Do We Report a Churn?
18 Sep 2023
Contributed by Lukas
In episode #67, I dive into churn reporting. This is a very common question. What month do we report churn? Finance and Customer Success like to repor...
What is the Difference Between a Cross-sell and an Upsell?
17 Sep 2023
Contributed by Lukas
In episode #66, I dive into expansion lingo. It’s important to track expansion correctly but you may have multiple product lines and multiple sales ...
How Do You Measure Bookings with Multi-year Contracts?
16 Sep 2023
Contributed by Lukas
In episode #65, I dive into the world bookings reports. It’s important that we have a common basis for reporting software bookings. This affects ana...