How To Calculate ARR Booking Target in Sage 50 | Arithmix

Calculating the Annual Recurring Revenue (ARR) booking target is a crucial step in forecasting and budgeting for any business. It helps in determining the expected revenue for the upcoming year and setting achievable targets for the sales team. In this article, we will discuss what ARR booking target is and when it is valuable to calculate it. We will also provide a step-by-step guide on how to calculate ARR booking target.

What Is ARR Booking Target?

ARR booking target is the expected amount of revenue a company plans to generate from its recurring revenue streams in a given year. Recurring revenue includes subscription-based services, maintenance contracts, and other recurring revenue streams. ARR booking target is calculated by multiplying the number of customers by the average annual recurring revenue per customer.

For example, if a company has 100 customers and the average annual recurring revenue per customer is $1,000, then the ARR booking target would be $100,000.

When Is It Valuable To Calculate ARR Booking Target?

Calculating ARR booking target is valuable for businesses that rely on recurring revenue streams. It helps in forecasting revenue for the upcoming year and setting achievable targets for the sales team. It also helps in identifying areas where the company can improve its recurring revenue streams.

ARR booking target is especially valuable for subscription-based businesses, as it helps in determining the number of new customers required to achieve the revenue target. It also helps in identifying the churn rate, which is the rate at which customers cancel their subscriptions. By calculating the churn rate, businesses can take steps to reduce customer churn and increase revenue.

How To Calculate ARR Booking Target

Calculating ARR booking target involves the following steps:

1. Determine the number of customers: The first step is to determine the number of customers who will be using the recurring revenue streams in the upcoming year. This can be done by analyzing past data or by making an educated guess based on market trends.
2. Determine the average annual recurring revenue per customer: The next step is to determine the average annual recurring revenue per customer. This can be done by analyzing past data or by making an educated guess based on market trends.
3. Multiply the number of customers by the average annual recurring revenue per customer: The final step is to multiply the number of customers by the average annual recurring revenue per customer. The result will be the ARR booking target for the upcoming year.

By following these steps, businesses can calculate their ARR booking target and use it to set achievable targets for the sales team and forecast revenue for the upcoming year.

How Do You Calculate ARR Booking Target in Sage 50

Sage 50 itself isn’t naturally geared towards letting you calculate complex metrics like ARR Booking Target. As an alternative, teams typically use products like Arithmix to import data from Sage 50 and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Sage 50, combine it with data from other systems, and create calculations like ARR Booking Target.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating ARR Booking Target in Arithmix

Calculating metrics like ARR Booking Target is simple in Arithmix. Once you've created your free account, you’ll be able to import your Sage 50 data, and use it to create natural language formulas for metrics like ARR Booking Target.

Arithmix is designed to give you the power to build any calculations you want on top of your Sage 50 data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.