Calculating Monthly Recurring Revenue (MRR) in Billing

Topic

How do I calculate MRR?

Instructions

You can calculate Monthly Recurring Revenue (MRR) by summing the monthly-normalized amounts of all active subscriptions at that time. For example, an annual subscription for $1,200 only counts $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 summing your invoices for instance, is because MRR is a forward-looking metric that is distinct from the immediate cash flow you are about to receive.