Monthly recurring revenue is a core signal for any SaaS company. It shows growth, but it does not tell the full story. To run a stable business, you also need to see retention, margins, payback, efficiency, and cash use. This guide gives a simple dashboard with six metrics beyond MRR. Each metric includes what it shows, how to calculate it, and a short list of actions.
Why MRR is not enough for SaaS finance
MRR can rise while unit economics weaken. Marketing can spend more to add low quality customers. Expansion can hide churn. Discounts can lift MRR but reduce margin. These gaps do not show in a single line. A focused set of six metrics fills those gaps and helps leaders act early.
How to set up the dashboard and data flow
Keep the data model simple. Pull bookings and churn from your billing tool, pipeline and bookings from your CRM, and cost lines from the general ledger. Use shared codes for customer, plan, region, and product. Refresh the dashboard every month after close. Keep one owner per metric so questions get answers fast.
Metric 1: Net revenue retention (NRR)
What it shows
NRR shows how much revenue you keep and grow from the same group of customers over a period. It includes upgrades and cross sell, and it subtracts downgrades and churn. Strong NRR means the product delivers rising value.
How to calculate
Start with beginning period recurring revenue from existing customers. Add expansion. Subtract contraction and churn. Divide by the beginning value.
NRR = (Beginning ARR from existing customers + Expansion − Contraction − Churn) ÷ Beginning ARR from existing customers.
Actions to improve
- Target expansion with clear add ons and seat growth
- Fix common downgrade reasons with simple product changes
- Add a save path for at risk renewals with offers that fit the use case
Metric 2: Gross margin
What it shows
Gross margin shows the share of revenue left after direct costs to deliver the service. It funds product, sales, and admin. A weak margin limits growth and raises cash needs.
How to calculate
Gross margin = (Revenue − Cost of revenue) ÷ Revenue.
Include hosting, support tied to delivery, third party licenses, and any delivery staff that scale with usage.
Actions to improve
- Review cloud cost by product and region, then right size usage
- Move heavy support tasks to self help and in-product guidance
- Re price plans that always consume high cost features
Metric 3: CAC payback period
What it shows
Customer acquisition cost payback shows how fast gross profit from a new cohort pays back sales and marketing spend. It links growth to cash timing. Shorter payback reduces risk and frees budget.
How to calculate
For a period, take new ARR added. Multiply by gross margin to get gross profit from that ARR. Divide the period’s sales and marketing spend by that gross profit. Convert to months.
Payback (months) = Sales and marketing spend ÷ (New ARR × Gross margin) × 12 if using annual values.
Actions to improve
- Focus on channels with strong lead to win rates
- Reduce discounts that do not raise retention
- Improve onboarding to cut early churn in new cohorts
Metric 4: Magic number (sales efficiency)
What it shows
The magic number estimates how much new ARR you gained for each dollar of sales and marketing in the prior quarter. It is a fast health check on growth spend.
How to calculate
Take the change in ARR from last quarter to this quarter, annualize it by multiplying by four, and divide by prior quarter sales and marketing spend.
Magic number = ((ARR this quarter − ARR last quarter) × 4) ÷ Sales and marketing spend last quarter.
Actions to improve
- Align outbound with segments where win rates and deal sizes are steady
- Improve demo to close steps so cycles shorten
- Shift budget to content or partners if they show better returns
Metric 5: SaaS quick ratio
What it shows
The quick ratio compares growth from new and expansion to losses from churn and contraction. It shows if growth is healthy or if churn is burning through gains.
How to calculate
Quick ratio = (New ARR + Expansion ARR) ÷ (Churned ARR + Contraction ARR).
Use the same period and definitions for all four inputs.
Actions to improve
- Raise expansion by adding clear upgrade paths in product
- Run churn review calls on closed lost reasons and fix top two drivers
- Set a save offer and a path back for customers who left in the last 90 days
Metric 6: Burn multiple
What it shows
Burn multiple shows how much cash you burn to add a dollar of new ARR. It ties growth to cash use and helps plan runway.
How to calculate
Burn multiple = Net cash burn in period ÷ Net new ARR in period.
Use cash burn from your cash flow view, not only the P&L. For early stage teams, a lower number shows more efficient growth.
Actions to improve
- Cut projects that do not move a core metric within one quarter
- Sequence hires behind growth milestones
- Improve renewal process to make ARR gains stick
Close the loop with targets, owners, and a monthly review
A dashboard works when it drives action. Give each metric a clear target range and an owner. Hold a monthly review with a short deck that shows trend lines, one slide per metric, and the top three actions for the next month. Keep a log of actions taken and results seen. Over time, the link between work and results becomes clear, and planning improves.
Setup checklist
- One source of truth for ARR and churn
- Shared code lists for plan, region, and product
- Metric owners with a backup owner
- Monthly refresh date and a simple change log
Next steps for your team
Publish a first version of the dashboard this month. Start with NRR, gross margin, CAC payback, magic number, quick ratio, and burn multiple. Add MRR and cash on a summary page so leaders see the full picture. Set targets for the next two quarters and assign owners. Run the first monthly review and agree on three actions. Repeat the cycle. Each month, the dashboard will guide better choices on pricing, product, and spend.
