Monthly Recurring Revenue is referred to as MRR. It is arguably the most important metric of any SaaS business. It’s important because it gives you the operational insight to accurately plan, forecast and measure growth.
For example, your forecast should detail your expenses month over month. Your MRR provides the ability to gauge if your recurring revenue is covering expenses. This provides the ability to budget with a relatively high level of confidence.
MRR provides the detailed information you require to effectively operate your company. Whether you have monthly or annual subscriptions, MRR normalizes varying contract terms that many SaaS businesses manage. It provides the ability to manage data consistently which is critical when analyzing and assessing subscription metrics.
MRR is the first step in managing all of your metrics. Doing it right is important as this data will affect all other key SaaS metrics.