MRR vs 30-day collections

ChartMogul defines it this way: “Monthly Recurring Revenue (MRR) is the normalized, predictable revenue a subscription business expects each month from active customers, excluding one-time fees… Multiply MRR by 12 to get Annualized Run Rate (ARR).”

On Ventmark, MRR follows the same idea:

• Only active, paid recurring subscriptions count.
• Annual plans are divided by 12.
• Free trials, past-due or paused subscriptions, one-time purchases and uncommitted usage are left out.
• Taxes are left out where they can be established.

Collections are the successful payments recorded in the last 30 days. They include one-time purchases, setup fees, annual prepayments and the taxes customers paid on top of the price. Refunds and disputes are reported separately. Processor fees and payouts are not product revenue.

Collections tell you how much money actually came in. They say nothing about whether it will come in again next month.

A small SaaS has, in one 30-day window:

• 40 customers on a monthly plan at Rs 999 a month;
• 5 customers on an annual plan at Rs 9,990 a year, 2 of whom paid their annual invoice in this window;
• Rs 25,000 of one-time setup fees;
• 18% GST added to every invoice.

MRR. Monthly plans: 40 × Rs 999 = Rs 39,960. Annual plans: 5 × Rs 9,990 ÷ 12 = Rs 4,162.50. Setup fees and GST are left out. MRR is about Rs 44,123, and ARR is about Rs 5,29,470.

30-day collections. Monthly payments Rs 39,960 + two annual payments Rs 19,980 + setup fees Rs 25,000 = Rs 84,940. GST at 18% adds Rs 15,289.20. Collections are about Rs 1,00,229.

Collections here are more than twice MRR, because a one-off setup fee, two annual prepayments and GST all landed in the same month.

Now 40 customers at $12 a month, 5 annual customers at $120 a year (2 paid in the window), $300 of setup fees and $102 of sales tax or VAT collected from customers.

ARR is MRR × 12: $530 × 12 = $6,360 a year. Collections × 12 is $1,122 × 12 = $13,464, more than double. The difference is one month's setup fees, annual prepayments and taxes counted twelve times over.

It can go the other way too. In a month with no annual renewals and no setup fees, collections can sit below MRR. Neither number is wrong. They measure different things.

The multiple on a Ventmark sale card divides the asking price by collections × 12, and says so. It is a rough guide, not ARR and not a valuation. See how to read the asking-price multiple.

• A figure shows as verified only when it comes from payment data the founder connected with read-only access and chose to share. The method is on the verification page.
• Revenue verification is built for Stripe, Dodo Payments and Razorpay and is rolling out provider by provider.
• Numbers a founder types in are labelled self-reported and shown to signed-in members only.
• A 30-day payment total is never labelled MRR.