# How To Calculate Net Annual Recurring Revenue in Sage 100 | Arithmix

Learn how to accurately calculate your net annual recurring revenue in Sage 100 with our step-by-step guide. Increase your financial insights and make informed business decisions with ease.

If you're running a business, you know that revenue is one of the most important metrics to track. But not all revenue is created equal. Net Annual Recurring Revenue (NARR) is a specific type of revenue that can give you a better understanding of your business's financial health. In this article, we'll explain what NARR is, when it's valuable to calculate, and how to calculate it in Sage 100.

## What Is Net Annual Recurring Revenue?

Net Annual Recurring Revenue is the amount of revenue that a business can expect to receive on an annual basis from its recurring revenue streams. Recurring revenue streams are those that generate revenue on a regular basis, such as subscriptions, maintenance contracts, or service agreements. NARR is calculated by taking the total amount of revenue generated from these recurring revenue streams over the course of a year, and subtracting any churn or lost revenue from those streams.

Churn is the amount of revenue lost from customers who cancel their subscriptions or contracts. To calculate churn, you'll need to know the total number of customers who cancelled their subscriptions or contracts during the year, as well as the average revenue per customer. Lost revenue is the amount of revenue lost from customers who didn't renew their subscriptions or contracts. To calculate lost revenue, you'll need to know the total number of customers who didn't renew their subscriptions or contracts during the year, as well as the average revenue per customer.

## When Is It Valuable To Calculate Net Annual Recurring Revenue?

Calculating NARR can be valuable for businesses that rely heavily on recurring revenue streams. By tracking NARR over time, you can get a better understanding of your business's financial health and growth potential. NARR can also help you identify areas where you may be losing revenue, such as high churn rates or low renewal rates. By addressing these issues, you can improve your business's overall financial performance.

## How to Calculate Net Annual Recurring Revenue in Sage 100

To calculate NARR in Sage 100, you'll need to gather data on your recurring revenue streams and churn/lost revenue. Here are the steps to follow:

1. Identify your recurring revenue streams. This may include subscriptions, maintenance contracts, or service agreements.
2. Determine the total amount of revenue generated from these recurring revenue streams over the course of a year.
3. Calculate churn by multiplying the total number of customers who cancelled their subscriptions or contracts during the year by the average revenue per customer.
4. Calculate lost revenue by multiplying the total number of customers who didn't renew their subscriptions or contracts during the year by the average revenue per customer.
5. Subtract churn and lost revenue from the total recurring revenue to get your Net Annual Recurring Revenue.

By tracking NARR over time, you can get a better understanding of your business's financial health and growth potential. And by addressing any issues with churn or lost revenue, you can improve your business's overall financial performance.

## How Do You Calculate Net Annual Recurring Revenue in Sage 100

Sage 100 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 Sage 100 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 100, 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.