How To Calculate Net Annual Recurring Revenue in Flexi | Arithmix

Calculating your net annual recurring revenue (NARR) is an essential part of understanding the financial health of your business. It helps you to determine the amount of revenue you can expect to generate from your existing customer base over the course of a year. This information is critical for making informed decisions about your business strategy, including budgeting, forecasting, and growth planning.

What Is Net Annual Recurring Revenue?

Net Annual Recurring Revenue is the sum of all the recurring revenue generated by your business over the course of a year, minus any cancellations, refunds, or discounts. This metric is particularly useful for businesses that rely on subscription-based revenue models, such as SaaS companies or membership-based organizations.

To calculate NARR, you need to take into account all of the recurring revenue streams generated by your business, including monthly or annual subscriptions, maintenance fees, and other recurring charges. You then subtract any refunds, cancellations, or discounts that occurred during the year to arrive at your net revenue figure.

It's important to note that NARR is not the same as total revenue. Total revenue includes one-time sales, while NARR only includes recurring revenue streams. This distinction is important because it allows you to focus on the revenue generated by your existing customer base, rather than one-time sales.

When Is It Valuable To Calculate Net Annual Recurring Revenue?

Calculating NARR is valuable for any business that relies on recurring revenue streams. This includes businesses that offer subscription-based services, such as software-as-a-service (SaaS) companies, membership-based organizations, and other businesses that generate revenue through recurring charges.

By calculating NARR, you can gain insights into the health of your business and make informed decisions about your growth strategy. For example, if your NARR is increasing year over year, it may indicate that your business is growing and that your customer base is expanding. On the other hand, if your NARR is decreasing, it may indicate that you need to re-evaluate your pricing strategy or customer retention efforts.

Overall, NARR is a valuable metric for any business that relies on recurring revenue streams. By calculating this metric regularly, you can gain insights into the financial health of your business and make informed decisions about your growth strategy.

How Do You Calculate Net Annual Recurring Revenue in Flexi

Flexi itself isn’t naturally geared towards letting you calculate complex metrics like Net Annual Recurring Revenue. As an alternative, teams typically use products like Arithmix to import data from Flexi 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 Flexi, combine it with data from other systems, and create calculations like Net Annual Recurring Revenue.

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 Net Annual Recurring Revenue in Arithmix

Calculating metrics like Net Annual Recurring Revenue is simple in Arithmix. Once you've created your free account, you’ll be able to import your Flexi data, and use it to create natural language formulas for metrics like Net Annual Recurring Revenue.

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