Calculating Monthly Recurring Revenue (MRR) in Billing

You can calculate Monthly Recurring Revenue (MRR) by adding up the monthly normalised amounts of all active subscriptions at that time. For example, an annual subscription for £1,200 only counts as £100 towards your MRR.

Things get more complicated once you consider discounts, tax, trials, delinquency, cancellations and metered billing. The reason that active subscriptions are used, rather than adding up your invoices, is because MRR is a forward-looking metric that is distinct from the immediate cash flow you are about to receive.