In episode #16, I address the Rule of 40, a popular investor metric. As a SaaS CFO, I like to say that financial discipline never goes out of style. There are lovers and haters of the Rule of 40. When investments were flowing, Rule of 40 was put on the back shelf.

- What is the Rule of 40?

- What is profit?

- What is growth?

- When should I use the Rule of 40?

- What does it mean, really?

- When is it a red flag?

SaaS Metrics courses here: https://www.thesaasacademy.com/

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In episode #15, I address variable revenue and sales and marketing efficiency metrics. This is Pillar 5 in my 5 Pillar SaaS Metrics Framework. Variable revenue can be usage, processing, transaction, consumption, etc. Your traditional SaaS metrics will mislead if you don’t make important changes in the formulas.

- What is variable revenue?

- Do you have subscription revenue and variable revenue?

- We must add variable revenue to the equation

- We must margin adjust appropriately

- Estimates are involved; nothing is perfect

SaaS Metrics courses here: https://www.thesaasacademy.com/

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #14, I address time periods and revenue retention. This was a question from my student community enrolled in my SaaS Metrics Foundation course.

- Are we talking about aggregate revenue retention?

- We can segment by ICP, product line, etc.

- Are we talking about cohort revenue retention?

- I calculate monthly, T3M, T6M, and TTM

- The danger of TTM retention

- Retention can be subjective

SaaS Metrics courses here: https://www.thesaasacademy.com/

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #13, I address our margins by revenue stream. It’s so important to have an accurately calculated gross margin and margins by revenue stream. It affects how you read your business and your SaaS metrics. You will not know where to focus to improve your business without this.

- What is our gross margin?

- What are margins by revenue stream?

- Proper revenue coding is critical

- Proper COGS department coding is critical

- Revenue stream margins feed SaaS metrics

Ben's SaaS Metrics courses here: https://www.thesaasacademy.com/

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #12, I address our overall gross margin. It’s so important to have an accurately calculated gross margin. It affects how you read your business and your SaaS metrics.

- What is our gross margin?

- How to calculate gross margin

- What are the traditional departments in COGS?

- You know where to focus

- High gross margin creates leverage and cash flow

- Revenue recognition is important

- What is best in class gross margin?

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #11, I address COGS vs Operating Expenses (OpEx). The coding between COGS and OpEx is critical. It requires a proper department structure and chart of accounts. Mess this up and your margins and metrics will be incorrect.

- What is COGS?

- What is OpEx?

- CS coding addressed in episode #10

- Proper coding for gross margins; sets us up for margins by revenue stream

- Proper coding for OpEx investment profile

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #10, I address a hotly debated topic. Where should your customer success team be coded? And it depends, of course. It can correctly fall in COGS or OpEx or both.

- The case for CS in COGS

- The case for CS in Operating Expenses

- The case for CS in both COGS and OpEx

- What does CS coding matter?

- What are the downline impacts of incorrect coding?

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #9, I address your SaaS cost of goods sold. I review a lot of SaaS P&Ls, and I’d say 90% are set up incorrectly. It’s so important to set up your P&L correctly to manage your business and calculate important SaaS metrics.

- What should be included in COGS?

- Your revenue streams dictate your COGS departments

- Why is COGS important?

- Expectations of COGS

- It starts with your chart of accounts and dimension coding

- Avoid the big bucket of expenses

Blog Post on SaaS COGS: https://www.thesaascfo.com/what-should-be-included-in-saas-cogs/

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #8, I talk about renewal rates, when it’s applicable, and how it differs from revenue retention. If you invoice annually and/or sell multi-year contracts, you must track your renewal rate. It’s a nice compliment to revenue retention and bolsters that story.

- What is the renewal rate?

- How does it differ from retention?

- It’s a nice compliment to retention

- Track customer and dollar renewal rate

- Where do you get renewal data?

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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In episode #7, I talk about the importance of your MRR schedule and the metrics that result from this schedule. It’s a top due diligence request. Nothing like DD to make you question your numbers.

- What is an MRR schedule?

- How do you create an MRR schedule?

- Tools to create your MRR schedule

- Rev rec can create havoc

- It’s a top due diligence data request

- No retention, no valuation

MRR and Retention templates: https://www.thesaascfo.com/how-to-create-your-mrr-schedule/

Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout

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