Your company’s performance is measured by its SaaS finance KPIs, and most entrepreneurs are aware that some metrics are more important than others.
As a result, in order for you to not have to worry about missing out on any of the most crucial ones when you are ready to finish your SaaS business plan, I have created a table of the 10 most significant SaaS KPIs.
Are you looking to get a finance position at a SaaS company? You need to learn these 10 SaaS finance KPIs.
Table of Contents
#1: KPIs in Finance and FP&A – Customer Churn Rate
- Description: Percentage of customers lost in a given time frame
- Formula: Customers lost / Total Customers
#2: New Buyer Growth Rate
- Description: Speed at which you gain new customers over defined periods of time
- Formula: (New buyers this month – New buyers last month) / New buyers last month
#3: KPIs in Finance and FP&A – Lifetime Value
- Description: Revenue from a customer over the retention time period
- Formula: Customer Value * Average Customer Lifespan
#4: Customer Acquisition Costs
- Description: Amount of money a company spends to get a new customer
- Formula: Cost of Sales and Marketing / Number of New Customers Acquired
#5: Net Burn rate
- Description: Net Cash spent by a company in a specific time frame (usually monthly or normalized to a year)
- Formula: Cash Spent – Cash received
#6: Runway
- Description: Time that a startup has before they run out of finances
- Formula: Current Cash Balance / Burn Rate
#7: Average Revenue Per User (ARPU)
- Description: Average revenue generated per customer (either monthly or annually)
- Formula: Total revenue / Total number of customers
#8: SaaS Quick Ratio
- Description: Compares revenue added (new business) vs revenue lost (churn)
- Formula: (New MRRt + Expansion MRRt) / (Churned MRRt + Contraction MRRt)
#9: Monthly Recurring Revenue (MRR)
- Description: Monthly revenue from customers with a subscription
- Formula: Number of customers * Average billed amount
#10: KPIs in Finance and FP&A – Total Addressable Market (TAM)
- Description: Market size of a product/service in value that the company can achieve
- Formula: Annual Contract Value per client * Number of potential clients
Conclusion – Consider These SaaS Finance KPIs for A Good Job Position
Effective design and accompanying communication will always go a long way, whether you run a SaaS company or are a leader in another area, and regardless of whether your financial KPIs’ audience is internal or external.
Therefore, you must establish SaaS finance KPIs that are pertinent to the management of your company and keep track of your successes and failures, as was covered in this article. However, these KPIs have to be relevant to your audience and in line with your goals.
Want to discover more KPIs? Here you can find many other relevant KPIs in finance and FP&A.
Finally, get your INSTANT access to the exact systems and methods that have helped me become an FP&A leader and a high performing finance professional.
