I work for a saas company. They have contracts that can be renewed annually as well as contracts for 1 time projects (non-renewable after 1st year). Should both be included in MRR, or just those that can renew?

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JASON LEMKIN

Include everything in your Revenue; and

Include only recurring contracts/revenue in your MRR.

It’s really that simple. Everything that brings in a dollar this month is revenue for this month. Just segment in. And use stacked charts to show the difference, e.g. 75% of our revenue is recurring, and 25% is from one-off payments, services, per-minute usage — whatever.

Keep it clear, play no games, and you’ll scale easier. If everyone isn’t 100% sure of definitions or even what your revenue is … that’s a problem.

All your revenue doesn’t have to be from recurring software. It’s OK.

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Published on April 4, 2018

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