How To Calculate Net ARR in MS Dynamics | Arithmix

Calculating net annual recurring revenue (ARR) in MS Dynamics is an essential task for any business that wants to track its revenue growth over time. Net ARR is a measure of the recurring revenue that a company generates from its customers over a year, after accounting for any cancellations or churn. In this article, we will explain what net ARR is, why it is valuable to calculate it, and how to calculate it in MS Dynamics.

What Is Net ARR?

Net ARR is a metric that measures the recurring revenue that a company generates from its customers over a year, after accounting for any cancellations or churn. It is a critical metric for subscription-based businesses, as it helps them understand their revenue growth over time. Net ARR is calculated by subtracting the revenue lost due to cancellations or churn from the total recurring revenue generated over a year.

For example, if a company generates $1 million in recurring revenue over a year, but loses $200,000 due to cancellations or churn, its net ARR would be $800,000. Net ARR is an important metric for businesses that want to understand their revenue growth over time and make informed decisions about their pricing, marketing, and customer retention strategies.

When Is It Valuable To Calculate Net ARR?

Calculating net ARR is valuable for any business that generates recurring revenue from its customers. It is particularly valuable for subscription-based businesses, such as software-as-a-service (SaaS) companies, that rely on recurring revenue to grow their business. By calculating net ARR, these businesses can understand their revenue growth over time, identify trends, and make informed decisions about their pricing, marketing, and customer retention strategies.

Net ARR is also valuable for businesses that want to track their revenue growth over time and compare it to industry benchmarks. By understanding their net ARR, businesses can identify areas where they are underperforming and make changes to improve their revenue growth.

How to Calculate Net ARR in MS Dynamics

Calculating net ARR in MS Dynamics is a straightforward process that involves the following steps:

1. Identify the total recurring revenue generated over a year
2. Identify the revenue lost due to cancellations or churn over a year
3. Subtract the revenue lost due to cancellations or churn from the total recurring revenue generated over a year

MS Dynamics provides businesses with a range of tools and features to help them track their recurring revenue and calculate net ARR. By using these tools, businesses can automate the process of calculating net ARR and generate accurate reports that help them make informed decisions about their revenue growth strategies.

In conclusion, calculating net ARR is an essential task for any business that generates recurring revenue from its customers. By understanding their net ARR, businesses can identify areas where they are underperforming and make changes to improve their revenue growth. MS Dynamics provides businesses with a range of tools and features to help them track their recurring revenue and calculate net ARR, making it easier for them to make informed decisions about their revenue growth strategies.

How Do You Calculate Net ARR in MS Dynamics

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

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 ARR in Arithmix

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

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