As we work with early stage companies, we often find that founders are confused about how to think about the right metrics. Many founders, for example, track revenue (e.g. accrued revenue in a month or quarter) or cash collected represented as revenue, both of which are not very helpful to monitor the progress of a SaaS company.
The golden metric for SaaS companies is Annualized Recurring Revenue (ARR, sometimes also referred to as CARR).
This document is meant for young SaaS companies, typically with ARR less than $5M. It should help you monitor ARR and associated key metrics like growth, gross margins, CAC. For SaaS companies with ARR above $5M, the MIS can get more complex as either revenue or the cost gets a bit more detailed by customer segments (SMB or enterprise), geo (US vs India vs others) as well as channels (direct vs partners).
We have also added comments in the MIS to define the metric and explain why it is important.
Note: This template is not relevant for SaaS companies with Usage-based pricing or PLG as a GTM strategy.