What is churn?

Churn (or attrition) refers to the loss of customers or recurring revenue over a given period. We generally distinguish churn by number of customers, or "logo churn" (the number of customers who cancel), from churn in MRR value (the amount of MRR lost following cancellations). MRR is a key indicator in SaaS: any decrease in MRR due to churn reflects revenue attrition.

The different types of churn tracked in Fincome

Several churn indicators are available in Fincome in order to offer a complete view of attrition: these metrics can be found in particular in the platform's "Churn rate" category. We mainly distinguish:

1. Churn rate in value (customers)

What it measures: the amount of MRR lost due to customers who fully terminated (all their subscriptions), expressed as a percentage of the MRR at the start of the period. This is the "gross" MRR churn at the customer level. A simple downgrade does not enter this calculation: only a customer's complete departure is counted.

Formula: MRR lost via fully terminated customers ÷ MRR at the start of the period.

Example: your MRR on the 1st of the month is €50,000. Three customers terminate all their subscriptions, i.e. €2,000 of MRR. The churn rate in value (customers) for the month is 4% (2,000 / 50,000).

2. Churn rate in value (customers – with contraction)

What it measures: the same logic as the previous indicator, but adding contractions. We add the MRR lost via fully terminated customers and the MRR lost via downgrades / reductions (customers who remain active but pay less). This is the most complete view of gross revenue erosion.

Formula: (MRR lost via terminations + MRR lost via contractions) ÷ MRR at the start of the period.

Example: on a starting MRR of €50,000, you lose €2,000 via terminated customers and €1,000 via downgrades. The churn rate with contraction is 6% ((2,000 + 1,000) / 50,000), versus 4% without the contraction.

3. Churn rate by number of customers (logo churn)

What it measures: the number of customers lost over the period, relative to the number of customers at the start of the period. Here we count heads, not euros: a small customer and a large customer carry the same weight.

Formula: Number of terminated customers ÷ Number of customers at the start of the period.

Example: you have 100 customers at the start of the month and 5 fully terminate their subscription. The month's logo churn is 5%.

4. Churn rate in value calculated at the subscription level

What it measures: the MRR lost due to terminated subscriptions, calculated at the level of each subscription and not the customer. The difference is key for multi-subscription customers: if a customer has 3 subscriptions and terminates 1, that loss is counted here — whereas it is not in the "customers" churn (since the customer remains active).

Formula: MRR lost via terminated subscriptions ÷ MRR at the start of the period.

Example: a customer pays €900 of MRR spread over 3 subscriptions of €300. They terminate 1. At the subscription level, €300 of MRR is counted as churn. At the customer level, this same case would be treated as a contraction, not a churn.

Churn recognition options

• At the cancellation request date: The churn is recognized immediately at the date when the customer requests the cancellation of their subscription. For example, if a customer sends their termination request on June 10th (even if the service ends later), Fincome will record a churn dated June 10th. This approach tracks churn as close as possible to the customer signal (the cancellation request).
• At the effective cancellation date: The churn is recognized at the effective subscription end date in the system, i.e. when the subscription has actually ended. For example, if a subscription is scheduled to end on June 30th, the MRR loss will be recorded on June 30th, even if the request was made earlier. This option aligns churn with the effective end of the contract.
• At the end of the last paid service period: The churn is recognized once the customer has used up the already paid period. Concretely, Fincome will consider the end of the billed period as the churn date. For example, if a customer has paid for their subscription until June 30th, the churn will be dated June 30th, regardless of whether the termination was requested earlier. This option ensures that the churn is recorded at the moment when recurring revenue actually stops being received (end of the paid coverage).

The diagram below describes these possible options:

Thus, in the diagram above, customer X cancels on date T, for example December 15th, so their subscription ends on that date. However, in most cases customer X benefits from the service until the end of the current month, i.e. until December 31st. Fincome takes January 1st at midnight as the effective end date of the billing period, materializing customer X's churn in the month of January.

Special case: a discount bringing the MRR to zero (hidden option)

In some cases, a €0 invoice (following a discount or an exceptional credit note) can temporarily bring the MRR down to zero, without the customer having actually churned. By default, Fincome interprets this case as a churn, since no active MRR is detected.

To avoid this false detection, an advanced option lets you treat these cases as a contraction: the €0 MRR is recognized as a temporary revenue decrease, provided that an invoice is indeed present. The customer is then not counted as churned as long as the subscription remains active and the last invoice has not been canceled.

This option only applies if an invoice exists. In the complete absence of billing, the MRR is considered lost (churn).

Enabling this option requires manual intervention by Fincome support. Contact us if you want to enable it so as not to distort your churn indicators in cases of €0 invoices.

Updated on: 03/07/2026