Calculation methodology

• Calculation of LTV

  What is LTV? LTV, or Lifetime Value (Customer Lifetime Value), refers to the estimated amount a customer will spend on your product over the total anticipated duration of their subscription, including renewals. It lets you estimate the total value of each subscriber based on the revenue they will generate over their "lifetime". It is a synthetic metric, often used in the following contexts: Assessing the profitability of a channel or customer segment Tracking the overall performaFew readers

• Calculation of MRR and ARR

  Why does Fincome calculate MRR and ARR? Fincome's mission is to centralize billing data (Stripe Billing, Chargebee, Hyperline, Sellsy, Pennylane, incoming APIs) and standardize its reading in order to provide in real time the key indicators of SaaS growth: MRR, ARR, churn rate, NRR, projections, forecast scenarios, etc. A consistent calculation of MRR/ARR regardless of your PSP (payment service provider) is essential to ensure the consistency of your reporting. Indeed, without uniform rules:Few readers

• Calculation of CMRR and CARR

  What is CMRR? CMRR is a snapshot of the monthly value of all your current and future subscriptions to date. It is aligned with the events providing information on future billing and is always one step ahead of MRR. CMRR includes: Current MRR New future subscriptions (from the signing date) Future churns (from the cancellation request date) What is the difference between CMRR and MRR? MRR and CMRR are two indicators related to recurring revenue, but with different perspectives.Few readers

• Calculation of future MRR and future movements

  What is future MRR? MRR (Monthly Recurring Revenue) represents the amount of monthly recurring revenue generated by your active subscriptions at a given moment. Future MRR is a projection of this MRR over the coming months, calculated from active subscriptions and future subscriptions already recorded. It lets you visualize the trajectory of your recurring revenue taking into account the changes already scheduled in your billing system (e.g.: subscriptions with a deferred start, upcoming termFew readers

MRR vs revenue recognition

• Difference between MRR and revenue recognition

  MRR (Monthly Recurring Revenue) and revenue recognition are two key concepts for assessing the financial performance of companies that rely on recurring subscriptions. Although they both measure recurring revenue, their calculation method differs, in particular regarding proration and the way MRR is calculated at the end of each month. MRR (Monthly Recurring Revenue) MRR represents the sum of the monthly revenue generated by active subscriptions at a given moment. The MRR of a period is calcFew readers

• How revenue recognition, deferred revenue, and accrued revenue work

  To calculate the revenue recognized over a given period (a month, a quarter, a year), as well as the amounts of deferred revenue and accrued revenue at the end of that period, we first calculate separately the individual contributions of each invoice line to these different elements before aggregating them. Definition of revenue recognition Revenue recognition follows strict accounting rules and consists of recognizing revenue when it is actually generated, i.e. when a service is provided. UFew readers

MRR – ARR movements

• MRR – ARR movements

  One of the foundations of recurring revenue analysis in Fincome relies on tracking MRR (Monthly Recurring Revenue) variations. Fincome calculates the monthly MRR of each active subscription and automatically detects changes in value, called MRR movements. Each movement corresponds to a net variation of the MRR between two periods, and adding up all of a subscription's past movements reconstitutes its current MRR. These movements are analyzed in two complementary views: **"Customer-Few readers

Churn recognition

• Churn recognition

  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 ![](https://storage.crisp.chat/users/helpdesk/website/Few readers

Foreign exchange (FX) impact

• Foreign exchange (FX) impact

  Foreign exchange (FX) impact – Principles, calculations, and reading in Fincome Conversion at the issue date: each line (invoice or credit note) is converted into your reporting currency at the ECB rate of the issue day. Monthly vs annual: Monthly subscription → a new rate applies at each cycle → the MRR varies with the foreign exchange market. Annual subscription → a single rate over the whole period → the MRR remains stable from one month to the next. **Operational readingFew readers

Impact of time zones on MRR calculation

• Impact of time zones on MRR calculation

  Why time zones can influence the MRR calculation In Fincome, invoice lines are interpreted according to their start and end date and time. To ensure the consistency of calculations, the platform automatically applies the time zone configured on the account (default: UTC +1 for France). This means that when an invoice line starts, for example, on 01/31/2025 at 11 p.m. UTC, it is converted to 02/01/2025 at 12 a.m. (UTC +1) in the MRR calculation. ➡️ As a result, this line wFew readers

Intra-period netting

• Intra-period netting

  The key principle: MRR is a snapshot at the end of the period In Fincome, MRR is always calculated as the state of recurring revenue at a snapshot date, which corresponds to the end date of the analyzed period. In other words, Fincome does not answer the question What happened during the period? but the question What is the state of the MRR at the end of this period? It is this principle that explains why movements (churn, reactivation, expansion, contraction) can appearFew readers

Products vs Plans

• Products vs Plans

  What is a product? A product corresponds to what your company sells, whether it is a physical good or a service. Examples: Standard License Analytics Module Onboarding service Credit pack The product represents the "what": the nature of the commercial offer, regardless of how it is billed. What is a plan? A plan corresponds to a recurring product to which a billing frequency and a price (amount + currency) are associated **Plan = Product + FrequeFew readers