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Forecast your subscription business using MRR – part 2

Written by Remco Kroes on . Posted in Exact Online

Exact Online offers all-in one business software in the cloud including CRM, accounting and subscription management. It is designed to support subscription-run businesses in helping them to manage their customers, recurring billings and subscription analytics. In an earlier post we wrote about our objective better support our subscription-run customers in measuring the growth of their subscription business.  In this post we discuss two new improvements made.

New: handling one-time subscription fees
To determine whether you are on track with your recurring revenue growth projections it is key to focus on only those future revenues that recur in the future. A key metric that helps you to monitor subscription growth is MRR. By definition, this metric excludes one-time fees or usage fees and only focuses on those revenues that recur. Until now it was not possible to track one-offs from within a subscription without affecting recurring revenue reporting. You had to separately invoice them, which is cumbersome to many subscription-run businesses that charge one-time fees (e.g. set-up or installation fees). In order to address this issue we now made it possible to include these one-offs in your subscription billings. We’ve designed it in such way that these one-offs are excluded from recurring revenue metrics. So you don’t have to worry that these one-time transactions affect your subscription growth metrics.

New: easily migrate your subscription history
Next to excluding one-offs, it is also key to be able to compare future revenue projections with historic subscription data. Comparing future revenues with the past helps you to better spot growth trends. Making past comparisons is often difficult when migrating to another subscription billing tool.  For example, let’s assume you always managed your recurring billings using spreadsheets or standalone billing tools. You decided to migrate your years of subscription history into Exact Online. Until now it was not possible to create new subscriptions in Exact Online where the start dates of both the subscription and subscription lines were in the past. Preventing you to migrate your subscription history and comparing future growth projections with past subscription data.

We now changed this and added a new field ‘invoicing start date’ to specify the date you want to start invoicing your existing subscription. Now you can have your subscription start-date and the from-to dates of your individual subscription lines occur in the past and have your first invoice date in the future. Enabling you to easily migrate to Exact Online without losing your recurring revenue history. The recurring revenue reporting takes the subscription start date and the from-to dates into account when calculating MRR. So you don’t have to worry you cannot compare last year’s result with forecasted revenue growth projections.

improvements

More information?

Both features are available in Exact Online Project & Contract Management. This product facilitates extensive capabilities for managing subscriptions, recurring revenues and service contracts. We are currently in controlled release. For more information, please contact remco.kroes@exact.com. For more information, please contact remco.kroes@exact.com.

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