Constantin Botnari - ACMA, CGMA’s Post

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CFO for VC-funded and bootstrapped SaaS/Tech startups. I do more than provide numbers - I explain the changes and offer improvement strategies.

I've seen many SaaS companies with low churn rates in their client base and ARR, but their monthly revenue still shows high churn. How is this possible? Revenue from monthly subscriptions changes because it’s not recorded correctly. It’s often not matched to the right subscription period or renewals. When revenue isn't matched correctly, duplicate revenue happens. Also, invoices might not be sent on time, making monthly revenue look like it has churn. Another issue is not separating income from subscriptions, training, or customisation. These monthly changes cause big problems for a SaaS company's financials. Investors will ask questions if your monthly revenue keeps going up and down. These fluctuations can hurt your chances of getting more funding.

Erum Siddiqui, CPA

Strategic CFO | Partnering with businesses for tax compliance, financial clarity and success | Specializing in Service-Based Businesses

3mo

Great point, proper bookkeeping is key to accurate reporting. Shame that its often an overlooked part of the business.

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