How To Calculate ARR by Cohort in Sage 300 | Arithmix

Calculating ARR (Annual Recurring Revenue) by cohort is a powerful way to analyze your business's revenue growth over time. By grouping customers who signed up during the same period and tracking their revenue over time, you can gain insights into how your business is performing and identify areas for improvement. In this article, we'll explore what ARR by cohort is, when it's valuable to calculate it, and how to do it in Sage 300.

What Is ARR by Cohort?

ARR by cohort is a way of measuring the revenue generated by a group of customers who signed up during the same period. For example, if you have a SaaS (Software as a Service) business, you might group customers who signed up in Q1 2020 and track their revenue over the next 12 months. This allows you to see how much revenue that cohort generates over time and compare it to other cohorts.

By tracking ARR by cohort, you can identify trends in your business's revenue growth. For example, you might notice that customers who signed up in Q1 2020 generate more revenue than customers who signed up in Q2 2020. This could be due to a variety of factors, such as the marketing campaigns you ran during that period or the features you offered at the time.

When Is It Valuable To Calculate ARR by Cohort?

ARR by cohort is valuable for businesses of all sizes, but it's particularly useful for SaaS businesses and other subscription-based models. By tracking the revenue generated by each cohort over time, you can identify which cohorts are the most valuable and focus your marketing and retention efforts on those customers.

ARR by cohort is also useful for identifying trends in your business's revenue growth. For example, if you notice that your revenue growth is slowing down for each successive cohort, it could be a sign that your business is reaching saturation in its target market. Alternatively, if you notice that your revenue growth is accelerating for each successive cohort, it could be a sign that your business is gaining momentum and attracting more valuable customers.

How to Calculate ARR by Cohort in Sage 300

Calculating ARR by cohort in Sage 300 is relatively straightforward. Here are the steps:

1. Export your customer data from Sage 300 into a spreadsheet.
2. Group your customers by the period in which they signed up (e.g. Q1 2020, Q2 2020, etc.).
3. Calculate the total revenue generated by each cohort over the next 12 months.
4. Divide the total revenue for each cohort by the number of customers in that cohort to get the average revenue per customer.
5. Repeat this process for each cohort.

Once you have calculated the ARR by cohort, you can use it to identify trends in your business's revenue growth and make data-driven decisions about marketing, retention, and product development.

In conclusion, calculating ARR by cohort is a powerful way to analyze your business's revenue growth over time. By grouping customers who signed up during the same period and tracking their revenue over time, you can gain insights into how your business is performing and identify areas for improvement. With Sage 300, calculating ARR by cohort is easy and straightforward, so start analyzing your business's revenue growth today!

How Do You Calculate ARR by Cohort in Sage 300

Sage 300 itself isn’t naturally geared towards letting you calculate complex metrics like ARR by Cohort. As an alternative, teams typically use products like Arithmix to import data from Sage 300 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 300, combine it with data from other systems, and create calculations like ARR by Cohort.

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 by Cohort in Arithmix

Calculating metrics like ARR by Cohort is simple in Arithmix. Once you've created your free account, you’ll be able to import your Sage 300 data, and use it to create natural language formulas for metrics like ARR by Cohort.

Arithmix is designed to give you the power to build any calculations you want on top of your Sage 300 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.