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Ben | The SaaS CFO

@TheSaaSCFO

Mar 18

Hey, SaaS founders and finance pros, have you heard of Remaining Performance Obligations (RPO)?

It's a required disclosure for public SaaS companies and provides forward-looking revenue visibility.

Quick thread. #saas #RPO

RPO is the value of contracted revenue that SaaS companies expect to recognize in the future from existing contracts with customers.

It's an important measure of a company's revenue visibility and backlog.

Salesforce's (CRM) definition:

The “contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods.”

Read 9 tweets

Ben | The SaaS CFO

@TheSaaSCFO

Mar 14

Your cash balance is the result of the decisions you make every day in your business.

If you're in a cash-burn mode, you must have a path to profitability. Understand the levers to pull with my 5 Pillar SaaS Metrics Framework.

Quick summary. #saas

I use my framework as a roadmap to financial transparency and better decision-making in SaaS.

Move from left to right. Right metrics for the right stage of your business. #metrics

Pillar 1️⃣ - Growth📈

Understanding the “layers” of recurring revenue is key to understanding growth.

➡️ New
➡️ Expansion
➡️ Contraction
➡️ Churn

Read 8 tweets

Ben | The SaaS CFO

@TheSaaSCFO

Mar 1

SaaS Metrics are more powerful when used together. In isolation, they offer less context.

Assess your CAC Profile to grasp the full picture of GTM efficiency.

🧵 Here’s a quick summary to help you analyze your CAC profile and grow. 📈 #saas

You will need the following inputs for CAC profile calculations:

1️⃣Sales expenses - wages, taxes, benefits, travel, commissions, CRM, training, etc.
2️⃣Marketing - marketing, paid ads, conferences, brand, swag, ESP, etc.
3️⃣Bookings - dollars and logo counts

4️⃣MRR/ARR - includes new, expansion, and maybe contraction

5️⃣Logo count - the number of new customers/users each month

6️⃣Gross Margin - recurring gross margin and maybe variable gross margin

Read 8 tweets

Ben | The SaaS CFO

@TheSaaSCFO

Mar 1

2023 is about time to value!

Watch this short demo on how you can create and publish your first #SaaS metrics dashboard in 2 minutes.

Follow the thread to see this live dashboard in your browser and how to create your dashboard account.

See the live dashboard here. It's very easy to share with your team, Board, and investors without adding them as users. app.backofficetools.com/metricsdashboa…

To create an account and your first dashboard, register for this short video tutorial here. thesaasacademy.com/offers/FGT86tv…

Read 4 tweets

Ben | The SaaS CFO

@TheSaaSCFO

Feb 3

How important are clear and distinct revenue streams in SaaS? Well, your valuation depends on it.

The proper SaaS P&L setup helps your team, your Board, and your investors.

Quick guide. #saas

SaaS Revenue Streams

It's no longer just subscription revenue for SaaS companies. That was SaaS pricing 1.0.

I've worked with SaaS companies that had 5 distinct revenue streams.

Have you clearly defined your revenue categories?

Subscription Revenue

🚀Generated from invoicing subscription contracts that range from monthly to multi-year. Your product and resold products. This is contracted MRR or ARR.

☠️Careful with resold products. I may roll up to subscriptions but I code to a different GL account

Read 10 tweets

Ben | The SaaS CFO

@TheSaaSCFO

Jan 31

Time for Advanced SaaS COGS. COGS vs OpEx is so important to get right.

But what if we have multiple revenue streams? Our COGS section must align with this.

Quick guide. #saas

What departments are included in pure-play SaaS COGS?

For pure-play SaaS, your COGS structure should include:

1⃣Technical Support
2⃣Professional Services
3⃣Customer Success
4⃣Dev Ops

Of course, CS is up for debate depending on their role.

Dev Ops = Cost of Ops in my example

What if we have more than just subscriptions and services?

It's very common in SaaS to have subscriptions, services, and variable revenue streams.

I had one client with all but managed services in the pic below.

Read 7 tweets

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