SaaS Finance Glossary

Annual Recurring Revenue — normalized annual value of active subscription contracts.

ARR derived from the billing / subscription system of record — invoices, entitlements, and contract schedules.

Contracted value signed in a period — often ACV or TCV depending on company definition.

ARR inferred from CRM opportunities or account fields — useful for pipeline, risky as board source of truth.

Monthly Recurring Revenue — the monthly view of subscription recurring value.

Period change in ARR — typically new + expansion − contraction − churn (policy-dependent).

Open opportunities weighted or unweighted toward future bookings and ARR.

Bridge from beginning ARR to ending ARR via new, expansion, contraction, churn, and other movements.

Lost recurring revenue (logo or dollar) from customers ending or reducing contracts.

Decrease in recurring revenue from existing customers who remain active at a lower level.

Increase in recurring revenue from existing customers (upsell, seats, usage uplift under policy).

Gross Revenue Retention — retention of starting ARR before expansion credit.

Count of customers lost in a period — customer retention, not dollar retention.

Net Revenue Retention — ending ARR from a starting cohort including expansion, contraction, and churn.

ARR lost from cancellations (and sometimes contraction) in a period — dollar retention view.

The curated package of metrics, bridges, and narrative directors use to govern the company.

The process of finalizing a reporting period’s financial and operating metrics for reporting.

Financial Planning & Analysis — the finance function that plans, forecasts, and explains performance so leaders can decide with confidence.

Management’s Discussion & Analysis — narrative explaining results, drivers, and outlook.

Structured explanation of why actuals differ from plan, prior period, or forecast.

Projected cash receipts and disbursements — the liquidity view that must reconcile to ARR and billings stories.

A continuously updated outlook that blends year-to-date actuals with forward plan assumptions.

Months of cash remaining at the current net burn rate.

Comparing alternate outlooks (base, upside, downside) on the same driver model.

Liability for cash collected (or billed) before revenue is recognized under GAAP.

Revenue recognized under ASC 606 / company accounting policy — distinct from ARR.

Net burn divided by net new ARR — efficiency of growth spend in a period.

Customer Acquisition Cost — sales and marketing spend to acquire a customer.

Lifetime Value — expected gross profit from a customer relationship.

Financial Intelligence Segregation of Duties — keep deterministic financial calculation separate from AI interpretation.

Separating responsibilities so no single person (or system) controls a process end to end without an independent check.