How To Calculate Net Annual Recurring Revenue in Quickbooks Online | Arithmix

Calculating your net annual recurring revenue (NARR) is an essential part of understanding the financial health of your business. NARR is a metric that measures the amount of revenue your business generates from recurring subscriptions or contracts over a year, minus any churn or cancellations. Essentially, it's the amount of money you can expect to earn from your existing customer base over the next 12 months.

What Is Net Annual Recurring Revenue?

Net Annual Recurring Revenue is a metric used by businesses to measure the financial health of their subscription-based revenue model. It takes into account the recurring revenue generated by your customers over a year, minus any churn or cancellations. This metric is particularly useful for businesses that rely on subscriptions or contracts as their primary source of revenue.

Calculating NARR is important because it provides a clear picture of your business's financial health. It helps you understand how much revenue you can expect to generate from your existing customer base over the next 12 months, which can be used to make informed decisions about growth and expansion.

When Is It Valuable To Calculate Net Annual Recurring Revenue?

Calculating NARR is valuable for any business that relies on recurring revenue from subscriptions or contracts. This includes businesses in the software, SaaS, and subscription-based industries. Understanding your NARR can help you identify areas for growth and expansion, as well as potential areas of risk.

For example, if your NARR is decreasing over time, it may indicate that customers are churning at a higher rate than expected. This could be a sign that your product or service is not meeting their needs, or that there is increased competition in the market. On the other hand, if your NARR is increasing, it may indicate that your business is growing and expanding, and that your customers are satisfied with your product or service.

Overall, calculating your NARR is an important part of understanding the financial health of your business. It provides valuable insights into your customer base and can be used to make informed decisions about growth and expansion. By keeping a close eye on your NARR, you can ensure that your business is on a path to success.

How Do You Calculate Net Annual Recurring Revenue in Quickbooks Online

Quickbooks Online 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 Quickbooks Online 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 Quickbooks Online, 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 Quickbooks Online 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 Quickbooks Online 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.