The pandemic and the difficulties it has caused has led to strategic changes throughout all industries. While lockdowns and accelerated digital transformations continue to be major sources of opportunity for SaaS companies, they are not something to be taken on blindly.
So what is the key to taking on new opportunities in a smart and scalable way? By making sure that every decision is led by key metrics, and followed up with constant monitoring. These key SaaS metrics will help you gain deep insights into your business performance in order to make the best strategic decisions possible.
But which SaaS metrics deserve your attention? Read on to find our more about the 5 Key Saas metrics that you should always have your eye on.
The metrics that matter
All metrics have a role in highlighting the success and growth of your business. Nevertheless, we have highlighted five SaaS financial metrics you cannot afford to overlook, including:
- Monthly recurring revenue (MRR): Both the MMR and the annual equivalent (ARR) should be measured by every SaaS business. This is useful to identify the MRR average per customer, as well as your recognised MRR.
- Cash flow: MRR misses out on one particular aspect: it doesn’t paint a picture of your company’s cash health. Thankfully, cash flow regularly measures cash flow and burn rate, so you are always aware of your true cash health and the runway total available.
- Churn: Every SaaS business would love a 100% renewal rate. Yet, we all know that this is not realistic. Churn is inevitable, but that doesn’t mean that it can’t be controlled. Careful monitoring can help identify if there’s an issue, such as pricing or customer dissatisfaction, that are resulting in excess churn. An acceptable churn rate for SaaS companies is between 3%-5%, and a good churn rate is considered 3% or less.
- Customer acquisition cost (CAC): This metric outlines how much it costs your business to acquire new customers. The quicker the CAC payback period, the more valuable it will be for your company.
- Customer lifetime value (CLV): The CLV demonstrates how much money customers spend with your company on average during their time as your customers. This helps in determining the profitability of each customer over time.
The best of both worlds
Billforward is the best developer-focused SaaS billing platform on the market. Our native integration with ChartMogul allows you to accurately measure all of the above SaaS metrics with ease, for real-time revenue insights — as soon as you start using Billforward.
If you have a Billforward account, all data from this account can be made available and then analysed in ChartMogul. Not only does this keep your all-important metrics updated, but it also allows you to easily places where your company can improve.
Using a dependable system like this is beneficial for several reasons. Most importantly, it saves you the time and effort required to tabulate metrics manually. Along with automatic calculations, you also gain deeper insights into customer usage and where your strongest upselling opportunities lie. ChartMogul is user-friendly too, allowing you to easily produce clear reports on revenue that management will love (little do they know it didn’t take you nearly as long to produce as your outdated manual reports).
Moving (Bill)forward with your metrics
Knowing your metrics and having the right platform has two main advantages.
Firstly, it makes your job a lot easier. Secondly, it provides benefits not only for your finance team, but also for your business as a whole.
Thanks to our integration with ChartMogul, your SaaS billing platform can help you streamline revenue operations in more ways than one. Monitor the metrics and stay ahead of the curve, and, most importantly, make sure that your SaaS company stays on track with its growth targets. These reports can be generated automatically so that you can always stay up to date.
Billforward also integrates with Salesforce and Quickbooks, some of the most popular CRM and accounting software options for SaaS companies. This presents you with even more expansive reporting possibilities for all of your needs.
One of the benefits of Billforward is that it integrates perfectly with your current setup. We know you likely already have a payment gateway system that is also integrated with your website. Trying to replace it would be a hassle. Thankfully, Billforward is “Payment Gateway Agnostic”. What does this mean? This means that Billforward works with any payment gateway, giving you the freedom to grow your business fluidly and without hassle to existing customers.
Visit our page to find out more about our billing system that works with your finance team.