SaaS Metrics School

By Ben MurrayBusiness Entrepreneurship Technology Management

SaaS Metrics School episodes

November 18, 2025Don't Forget to Allocate Your CAC
In episode #330, Ben explains one of the most common and costly SaaS finance mistakes: failing to allocate CAC between new and existing customers. This oversight leads to misleading KPI’s, inaccurate CAC payback, flawed LTV to CAC ratios, and unreliable unit economics. Ben walks through exactly how to allocate CAC the right way, how to segment sales and marketing expenses, and why this matters for accurate revenue efficiency metrics and due diligence.
Key Topics Covered
Why fully burdened sales and marketing expenses are required for accurate CAC
The danger of pushing all sales and marketing expenses into CAC without allocation
How to allocate CAC between new customer acquisition and expansion
How to segment sales teams (hunters vs. farmers) and avoid co-mingled headcount
Allocating marketing spend based on acquisition channels
Typical allocation benchmarks for sales (60-80% to new) and marketing (80-90% to new)
Why accurate CAC is essential for CAC payback, LTV to CAC, and cost of ARR
How the Cost of ARR provides a blended benchmark without requiring allocation
Using allocation methods for businesses with multiple product lines or motions
What You’ll Learn
How to correctly calculate CAC using fully burdened sales and marketing expenses
How to evaluate marketing economics and sales efficiency with proper allocation
Why unallocated CAC leads to distorted financial strategy and misleading KPI’s
How CAC allocation flows into CAC payback period, LTV to CAC, and ARR efficiency
How to build a repeatable, defensible go-to-market metrics framework that withstands due diligence

Who This Episode Is For
SaaS founders scaling beyond early customer acquisition
CFOs, FP&A leaders, and finance teams who own KPI modeling
Operators who need accurate CAC, CAC payback, and LTV calculations
Investors or advisors assessing revenue efficiency and go-to-market economics
Related Resources
SaaS Metrics Foundation course covering CAC, LTV, ARR, and unit economics: https://www.thesaasacademy.com/the-saas-metrics-foundation
Coaching resources on building an accurate, SaaS-specific chart of accounts: https://www.thesaasacademy.com/saas-cfo-coaching
4 min
November 15, 2025Do You Know the Difference Between SaaS Math and AI Math?
In episode #329, Ben Murray, The SaaS CFO, breaks down the growing debate around SaaS economics versus AI economics. A recent post claimed that “SaaS metrics are broken” and that traditional KPIs no longer apply to AI companies.
Ben challenges this idea and walks through why recurring revenue metrics still matter, how revenue models differ across SaaS and AI, and what CFOs need to understand about gross margin, unit economics, and total addressable market.
Key Topics Covered
Why claims that SaaS metrics are “broken” are inaccurate
The difference between SaaS economics and AI economics
Why recurring revenue metrics still apply to AI companies
How subscription versus usage revenue impacts KPI calculation
Gross margin expectations for SaaS vs. AI companies
Whether AI companies truly generate more profit per customer
The role of absolute profit versus per-customer economics
How AI may expand TAM by targeting labor budgets, not just software budgets
How Agentic AI affects financial modeling and cost structures
Using ROSE (Return on Software Employees) to evaluate AI-driven ROI
What You’ll Learn
Why SaaS metrics still matter for both SaaS and AI companies
How CFOs should evaluate margins, ARR, and revenue quality in AI models
The difference between rate-based economics (ARPA, ACV) and volume-based economics (absolute profit)
How to think about financial strategy when transitioning from a pure SaaS model to an AI-embedded product model
How to assess realistic AI unit economics instead of relying on hype

Who This Episode Is For
SaaS CFOs and finance leaders evaluating AI investments
Founders embedding AI into their product and adjusting their financial models
Operators who want a grounded understanding of real AI economics
Investors assessing how AI shifts revenue models and margins
Related Resources
Ben’s upcoming deep-dive blog post on SaaS vs. AI economics: TheSaaSCFO.com
SaaS Metrics Foundation course for mastering KPI’s, ARR, MRR, and unit economics: https://www.thesaasacademy.com/the-saas-metrics-foundation
ROSE metric framework for analyzing AI-driven productivity and financial systems: https://www.thesaascfo.com/saas-rose-metric/
6 min
November 13, 2025When Should Founders Fire Themselves as the CFO?
At what point should a founder stop running finance and accounting and hand the numbers to an expert?
In episode #328, Ben Murray walks through the inflection points when SaaS founders should consider hiring a bookkeeper and/or fractional CFO to protect data accuracy, improve forecasting, and strengthen company valuation. You’ll learn the warning signs that your financial systems and reporting are holding back growth—and how to build a finance function that scales with your business.
What You’ll Learn
When to hire help by ARR stage
Monthly close discipline: Why closing your books every month—accurately—is critical for investor trust.
Accrual vs. cash accounting: How switching methods reveals true business performance.
COGS clarity: Setting up a SaaS P&L that separates revenue streams, COGS, and OPEX for real gross-margin insight.
Retention readiness: Why your MRR schedule (revenue by customer by month) is worth its weight in gold.
Cash-flow forecasting: How to move beyond the bank-balance mentality to proactive cash planning.
Investor presentation: Ensuring your metrics, slide deck, and financial statements tie together cleanly.
Why It Matters
For Founders: Delegating finance isn’t failure—it’s a strategic step toward sustainable scaling and higher valuation.
For CFOs and Advisors: Knowing these trigger points helps you coach founders on financial readiness.
For Investors: A disciplined monthly close and clean P&L build confidence in revenue quality and forecasting accuracy.
Key Takeaways
Growth dictates urgency: the faster you scale, the earlier you need finance expertise.
A bookkeeper should close the books by mid-month to avoid costly cleanup later.
Move to accrual accounting to show economic performance and support fundraising.
Create an accurate MRR schedule to prove retention and ARR health to investors.
Build a basic forecast to manage cash runway and hiring decisions with confidence.
Resources Mentioned
SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation
Finance 101 for Founders: https://www.thesaasacademy.com/finance-101-for-saas-founders
Quote from Ben
“Just like I couldn’t go in and code your product, most founders can’t scale as CFO. At some point, finance needs a specialist so the business can keep growing on solid data.”
5 min
November 11, 2025The Dirty Secrets Behind SaaS Gross Margins
Your gross margin might not be telling the truth.
In episode #327, Ben Murray exposes the seven “dirty secrets” that distort SaaS gross margins — from incorrect COGS coding to missing allocations for shared resources and misclassified expenses. Whether you’re a CFO, finance lead, or operator, you’ll learn how to clean up your P&L and get accurate unit economics that reflect your true performance and valuation.
What You’ll Learn
The 7 big offenders that make SaaS gross margins misleading.
How to correctly code payment processing fees (Stripe, ACH, wire) under DevOps in COGS.
The difference between internal-use software and third-party apps embedded in your product.
How to classify customer success — adoption-focused vs. account management.
Why demo and test environments must be allocated properly between departments.
How to ensure fully burdened expenses (wages, taxes, benefits, bonuses) are coded correctly.
The impact of co-mingled headcount on margins by revenue stream.
Why department leaders belong in the departments they manage.
Why It Matters
For Founders: Clean accounting drives higher (or preserved) company valuation and investor confidence.
For Finance Teams: Accurate COGS and gross profit ensure your SaaS metrics are reliable.
For Operators: Clear expense allocation helps identify efficiency opportunities in support, services, and DevOps.
For Investors: Properly structured financial systems and accounting practices make due diligence faster and cleaner.
Key Takeaways
Misclassified expenses can make your gross margin appear stronger or weaker than it really is.
Always differentiate between OpEx and COGS — the foundation of credible financial modeling.
Track margins by revenue stream (subscription, usage, services) for true business insight.
Ensure your P&L reflects fully burdened costs per department — including contractors.
Clean financial data = higher trust from investors and buyers.
Resources Mentioned
SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation

Quote from Ben
“Your P&L doesn’t lie — but bad coding does. If your COGS and OpEx aren’t clean, your gross margin isn’t either.”
5 min
November 08, 2025 Legal Readiness Can Make or Break Your SaaS Exit
Thinking about raising capital or selling your SaaS company? Your legal readiness can make or break the deal.
In episode #326, Ben Murray breaks down what investors and acquirers look for during due diligence — and why preparing your cap table, contracts, IP, and financial systems at least six months in advance is essential to protect your company's valuation and ensure a smooth process.
What You’ll Learn
Cap Table Management: Why tracking every issued share, option, and agreement matters — and how to avoid “email equity surprises.”
IP Protection: The critical role of signed IP assignment agreements for employees, contractors, and vendors.
Customer & Vendor Contracts: Why detailed MSAs, renewal clauses, and change-of-control provisions are required for investor confidence.
Accounting Readiness: How clean, timely accounting — especially a complete MRR schedule (revenue by customer by month) — helps prove the health of your recurring revenue and ARR growth.
Sales Tax Compliance: Why sales tax exposure can derail your exit process.
Due Diligence Prep: How to build your data room, organize key documents, and present your SaaS business model with clarity.
Why It Matters
For Founders: Legal gaps can reduce your valuation multiple and slow down the exit timeline.
For CFOs: Solid financial systems and clean documentation protect your cash flow and reputation with investors.
For Investors: A well-prepared company signals operational maturity and reduces transaction risk.
For Operators: Legal readiness supports strategic growth and prevents “deal fatigue” during M&A or fundraising.
Resources Mentioned
Ben’s Blog Post: “SaaS Legal Readiness Checklist” : https://www.thesaascfo.com/why-legal-readiness-can-make-or-break-your-saas-exit/
SaaS Metrics Foundation Course – Learn how to align your financial reporting and recurring revenue metrics for due diligence success.
Upcoming Webinar: “Legal Readiness for SaaS Founders — How to Prepare for an Exit or Raise” (details via newsletter)
💬 Quote from Ben
“You can’t fix legal readiness in a week. Start six months early, or you’ll be scrambling during due diligence when investors start asking for data you don’t have.”
6 min
November 04, 2025Are SaaS Metrics Really Dead?
“SaaS metrics are dead.” You’ve probably seen that post on LinkedIn or X lately. In episode #325, Ben Murray cuts through the noise to explain why SaaS metrics aren’t broken — they’re just evolving to match modern recurring revenue business models.
Whether you’re running a SaaS, AI, software, or managed services company, the same financial principles apply. The key is understanding your revenue types — subscription, usage, consumption, or transaction — and applying the right metrics framework for each.
What You’ll Learn
Why SaaS metrics still work — and why the confusion exists.
The difference between SaaS as a delivery model and recurring revenue as a financial model.
Why the most important question isn’t “Are you SaaS?” but “What are your revenue types?”
How financial systems and P&L design should reflect these revenue categories for accurate unit economics and valuation.
Why It Matters
For Operators: The framework for recurring revenue metrics applies whether you sell software, data, or AI services.
For Finance Teams: You can’t manage what you don’t measure — ensure your financial modeling captures all recurring components.
For Investors: Strong recurring revenue visibility (ARR, NRR, margins) still drives valuation multiples — regardless of your label.
For Founders: Stop worrying about the buzz — focus on measuring what matters for your business model.
Key Takeaways
SaaS metrics = recurring revenue metrics.
Focus on revenue types, not just labels like “SaaS” or “AI.”
A clear chart of accounts and a well-designed financial system enable accurate SaaS metrics.
The fundamentals of finance, accounting, and valuation haven’t changed — only the packaging has.
Resources Mentioned
🧾 The SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation
Quote from Ben
“SaaS metrics aren’t broken — they’ve just outgrown the acronym. These are recurring revenue metrics that apply to most modern business models.”
3 min
November 01, 2025Your Implementation Team Could Be Killing Your Gross Profit Margin
Your implementation and professional services teams could be quietly eroding your gross profit margin — and most SaaS leaders don’t even realize it.
In episode #324, Ben Murray explains how unclear COGS structure, mispriced services, and untracked internal resources can distort your unit economics and lower your overall SaaS valuation.
If your service margins are negative or your gross profit doesn’t match expectations, this episode shows you exactly where to look — and how to fix it.
What You’ll Learn
Why implementation teams often kill gross profit without you noticing.
How to calculate services margins by setting up clean revenue streams and COGS cost centers.
The right services gross margin target.
Why doing “free” onboarding work can destroy your unit economics.
How underpricing services or blending resources (support, CS, services) skews your financial reporting.
The balance between protecting ARR and monetizing implementation revenue.
How to fix your SaaS P&L for visibility into margins by revenue stream.
Why It Matters
For CFOs & Founders: Misclassified or underpriced services directly lower gross profit, cash flow, and company valuation.
For Finance Teams: Clean COGS and OPEX separation creates accurate financial modeling, ARR margins, and retention-linked profitability.
For Investors: Understanding margins by revenue stream signals financial discipline and scalability.
For Operators: Properly scoped and priced services keep customer onboarding efficient and profitable.
Key Takeaways
Every SaaS company should know gross margin by revenue stream (subscription, usage, services).
Services losing 20–30% gross margin dilute your financial performance and cash flow forecasting.
Accurate classification drives better SaaS metrics, including CAC payback, Cost of ARR, and LTV:CAC.
A well-structured financial system is your best defense against margin erosion.
Resources Mentioned
Episode 323: Should Professional Services Be COGS or OPEX?
SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation
Quote from Ben
“If you don’t know your margins by revenue stream, you can’t manage them — and services might be the silent killer of your gross profit.”
5 min
October 30, 2025Should Your Implementation Team Be Coded to COGS or OpEX?
Where do professional services belong on a SaaS P&L—COGS or OPEX? In episode #323, Ben clarifies how to code implementation, onboarding, custom integrations, and the tricky custom development work that sometimes blurs the line with R&D. You’ll learn how correct classification protects gross profit, keeps investor metrics credible, and supports a higher company valuation.
- What You’ll Learn
What counts as Professional Services
When custom dev is OPEX (R&D) vs. COGS
How to handle integrations
Why coding accuracy matters
Practical P&L structure
- Why It Matters (Finance & Investor Lens)
Gross Profit Integrity: Correct COGS ensures reliable margins by revenue stream (subscription, services, usage) that investors expect.
Credible SaaS metrics: Clean separation supports accurate CAC payback (GM-adjusted), Cost of ARR, and LTV:CAC.
Valuation: Transparent accounting and financial systems reduce diligence friction and improve confidence in revenue quality.
Operator Clarity: Treat Professional Services as a self-sustaining business unit with clear targets for utilization and margin.
- Quick Checklist
Distinct GLs for subscription, usage, services revenue
Fully burdened Services COGS (wages, taxes, benefits, travel, tools)
Separate custom dev tracking (R&D vs. billable services)
Clear DevOps/hosting in COGS for delivery costs
CS in COGS only if non-selling (no quota/commission)
- Resources Mentioned
Guide: How to Structure a SaaS P&L (COGS vs. OPEX, margins by stream): https://www.thesaascfo.com/how-to-structure-your-saas-pl/
Course: SaaS Metrics Foundation: https://www.thesaasacademy.com/the-saas-metrics-foundation
- Quote from Ben
“Code services where the work and dollars actually live. If you blur R&D and Services, you’ll either hurt gross profit—or your OpEx profile. Either way, investors will notice.”
6 min
October 28, 2025Essential SaaS Metrics for a Series A Raise
Raising a Series A? Your story matters—but your SaaS metrics may close the deal. In episode #322, Ben outlines the investor-ready metrics founders must prepare. You’ll learn what each metric signals to investors, how it ties to valuation, and where founders slip on accounting and financial systems.
Why It Matters (Investor Lens)
Investor metrics translate your story and traction into company valuation (multiples tied to growth + retention quality).
Clean financial modeling depends on accurate accounting (COGS vs OPEX), solid financial systems, and reliable unit economics.
Segmented metrics (by ACV/product/segment) de-risk assumptions and speed due diligence.
Resources Mentioned
Blog: Essential Series A Metrics (+ deep dives for each metric): https://www.thesaascfo.com/essential-saas-metrics-for-a-series-a-fundraise/
Course: SaaS Metrics Foundation: https://www.thesaasacademy.com/the-saas-metrics-foundation
Quote from Ben
“In Series A, the story still matters—but the metrics support the story that investors underwrite.”
7 min
October 21, 2025Is LTV Flawed with Multi-year Contracts?
Is the traditional LTV formula giving you misleading results when you have multi-year SaaS contracts?
In episode #321, Ben Murray unpacks a listener’s question about how Lifetime Value (LTV) should be calculated when customers sign multi-year agreements. Using real-world finance and accounting logic, he breaks down how multi-year contracts can inflate your aggregate revenue retention (GRR) and distort LTV:CAC ratios — and how to fix it.
You’ll learn when to adjust your LTV calculation to use cohort retention, renewal rate, or aggregate GRR, depending on your business model and contract structure. The Retention Triangle!
What You’ll Learn:
The correct LTV formula for SaaS
Why multi-year contracts can artificially boost retention and lifetime value.
When to use aggregate GRR, renewal rate, or cohort retention in your LTV calculation.
How to interpret the “triangle of retention”: aggregate, renewal, and cohort retention.
Why LTV is a point-in-time metric, not a cumulative one.
How to explain your retention assumptions clearly during due diligence or a fundraising process.
Why It Matters:
For SaaS CFOs & Finance Teams: Using the wrong retention assumption can lead to overestimated LTV:CAC ratios, poor financial modeling, and investor skepticism.
For Founders & Operators: Understanding how contract length impacts SaaS economics helps you make better pricing and renewal decisions.
For Investors & Buyers: Accurate LTV and retention analysis provide confidence in the predictability of future revenue.
For Accounting Leaders: Aligning your LTV calculation with your revenue recognition and retention tracking ensures accurate SaaS reporting.
Resources Mentioned:
No Fluff Series – The SaaS Academy: https://www.thesaasacademy.com/pl/2148384654
Quote from Ben:
“Multi-year contracts can make your LTV look great — until investors realize it’s inflated by locked-in customers. That’s why understanding retention dynamics is critical.”
6 min

About SaaS Metrics School

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Ben Murray brings you actionable SaaS metrics lessons that he has learned through years of being in the SaaS CFO trenches. Whether you are new to SaaS or a SaaS veteran, learn the latest SaaS and AI metrics, finance, and accounting tactics that drive financial transparency and improved decision-making.