Knowing your MRR is critical because it serves as a pulse for your business. By keeping an eye on your MRR you can get an idea for how well your business it's growing. As a SaaS company, you have a number of customers that buy one or more products from your catalog - where the contract details can be subject to change. Billing dates, upgrades and downgrades all end up playing a role in your MRR.
How is MRR Calculated?
Ultimately, MRR is the sum of your monthly revenue. Depending on the complexity of your contracts and products... this is a rather straightforward KPI to calculate. Although for a company with a growing customer base and a product catalog that's open to mid-contract changes - an excel sheet may not cut it. It becomes an incredible time sink to try and calculate your MRR when the number of contracts are increasing and customers are downgrading or upgrading their plans. In addition to it being a time sink - the complicated it gets, the more you leave yourself open to making errors.
MRR and expansion MRR helps you answer important questions such as:
How are you doing this month?
What’s the projected revenue for the next three months?
Are your existing customers growing your revenue through upgrades?
Answering these questions is never usually clear cut and because of that, it ends up derailing the work you're doing or puts you off on a tangent to find the answers. When you integrate TrueRev with your QuickBooks, you get these answers within a few clicks... and what's better than that? You can drill down to take a look at individual customers and even see the contracts. The great thing with these MRR Reports is that you can export it and send it to whoever you want. Here you'll learn how to get to the MRR Report and how to drill down to get more insight.
Once a customer comes through the door and purchases from you, it becomes a lot easier to cross sell them another product/service that may add value. Why? They trust your business, the credibility is there and hopefully some relationship with your staff. How good is your company at growing the revenue from your existing customers. Expansion MRR is what you would need to monitor whether customers are buying more or less from you.
Opening the MRR Report in TrueRev
From the Home page, select Reports in the left menu column.
Select View All Reports on the right of the screen.
Scroll down and you will see the Recurring Revenue Reports, select MRR by Product.
What do you do from here?
Drill down! From this report you can see which customers are behind the increase in new MRR or are responsible for the contraction MRR.
Let's drill down on 'Genuiti Software Inc', they will be our sample customer. After selecting 'Genuiti Software Inc', you'll see all the monthly metrics for only that customer. See the new MRR, the expansion MRR, Contraction MRR, Churn MRR for the current month, 6 months from now or whenever you want. From there, you have the option to drill down even further. What if you wanted to get more details on the $1000 in new MRR that Genuiti Software is showing for February. You can select 'New MRR' and drill down to find the exact invoice.