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For any SaaS (Software as a Service) or subscription-based business, measuring growth is key to success. Making decisions based on business data is another important factor for growth. The key data necessary for making decisions is sales data: who, when, and how much customers spend.

For those businesses, Annual Reporting Revenue (ARR) and Monthly Reporting Revenue (MRR) are perhaps the most important performance metrics. Data that can be easily pulled and calculated in Salesforce.

## **What is MRR and ARR and Why Are They So Important?**

**Annual Recurring Revenue (ARR)** gives you the yearly picture of how your business is performing and the revenue being generated. These revenues are predictable, stable, and can be counted on to occur at regular intervals going forward with a relatively high degree of certainty.

ARR is very useful as a metric that helps organizations that work with Salesforce to:

- Increase in revenue. Tracking relationship gives valuable insight into what customers want and need, it helps to promote cross-selling and up-selling activities
- Retain top sales managers. Monitoring ARR encourages top management to focus on individual sales areas to judge what’s working and what needs changes. Compensation commensurate with productive job performance results in less turnover and cuts new employee training costs.
- Revenue predictability. Tracking the value of renewals and the cost of lost customers helps businesses to manage expenses and maintain cash resources. It helps to forecast revenue from potential customers.
- Quantifies the company’s growth ARR measures company performance in specific areas, showing where revenue is growing or being lost, and why. Knowing your ARR can help you make better decisions regarding employee assessment, compensation, operational planning, and financing to improve the bottom line and help increase company efficiency.

## **How to Calculate Annual Recurring Revenue**

Calculating ARR doesn’t have to be difficult. You can easily do this by analyzing your Salesforce data. Divide the total contract value by the number of years. It includes only subscription fees, not one-time purchases.

For example, if you consider a company with one customer who took up a two-year subscription for a total amount of $8,000. Calculate the company’s ARR by simply dividing the contract’s total amount by the contract’s length:

ARR = $8,000 / 2 = $4,000

Anyway, in real life, businesses, often enough,  organizations prefer breaking down the total number into some individual ARRs. The common Salesforce ARR components might include the following:

- ARR added from new customers
- ARR added from renewals from current customers
- ARR added from upgrades from current customers
- ARR lost from downgrades from current customers
- ARR lost from churned customers

### The basic formula to calculate ARR

## **Monthly Recurring Revenue (MRR)**

MRR measures the total amount of predictable revenue that is expected every month. It’s a way to average your various pricing plans and billing periods into a single, consistent number that you can track the trend of overtime.

### **How to calculate MRR?**

Calculating monthly recurring revenue on a high level is straight forward.

**MRR = # of customers \* average billed amount**

So 10 customers paying you an average of $100 per month would mean an MRR of $1,000.

## **Why tracking MRR is important**

Successful SaaS companies track their MRR in Salesforce for two main reasons:

- Financial forecasting and planning
- Measuring growth

On the first look, MRR is a simple metric, it’s actually very diversified and can give a crucial picture of how the business is growing or not growing.

### **There are five types of MRR**

- New MRR - from the new customers
- Expansion MRR - upgrades
- Reactivation MRR - from former customers
- Contraction MRR - downgrades
- Churned MRR - from lost customers

The reason knowing those types is important is that it gives you direct insight into the “why”. You get to see _exactly_ why your MRR went up or down in a given month. If you aren’t breaking out your MRR by type, you’re missing out on some crucial data points.

For subscription businesses, in any given month, new customers will always be signing up and existing customers will upgrade, downgrade, or potentially even take their business elsewhere. As a result, your MRR will be under constant upward and downward pressure, so it’s important to track this metric to recognize the source of these changes. Compared to the traditional business model, a challenge of the recurring billing model is that you are not managing one-time sales, you are managing the customer life cycle.

If you want to read more about the ARR and MRR Salesforce topic, click [here](https://www.salesforce.com/resources/articles/how-to-calculate-recurring-revenue/)

Check also [What operational metrics you should measure](https://cloudanswers.com/what-operational-metrics-should-you-measure/)

### Need help in setting your Salesforce CRM?

Contact us, we will help you to get the most out of your CRM.

How to calculate Annual Recurring Revenue and Monthly Recurring Revenue with Salesforce Data. Focuse on the reports be easily pulled and calculated in Salesforce.

how-to-calculate-annual-reporting-revenue-and-monthly-reporting-revenue

How to calculate ARR and MRR

Within the [Salesforce platform](https://www.salesforce.com/), there are many measurement tools that allow the decision-makers to take a wide-angle view of their team’s performance and simultaneously grasp the important details that may go unnoticed.

**Salesforce reports** allow a business to understand its current revenue pulse, make decisions for the future, and set goals for advancement. The information provided by reports and dashboards is very important in today’s environment, where it’s critical to be proactive, rather than reactive. And business leaders have questions that reports can answer. But if your Salesforce reports are not configured in a manner that responds to your inquiries – how will you be able to make decisions?A good report should contain all the information necessary to support decision-making. Furthermore, it should lead directors and top management to ask the right questions and initiate a series of actions. That will increase the ability of the organization to achieve it's short- and long-term goals and create sustainable value.

## Good quality information should be:

**RELEVANT** - presented information should be focused and match the defined objectives and the strategy. In other words, does it answer the questions your team is asking?

**INTEGRATED** - reported information should be produced for a range of internal and external purposes. It should be used in your presentations and in meetings.  It should be based on data that is updated regularly through normal business processes.

**IN PERSPECTIVE** - all the information should be presented in relevant time frames and appropriately filtered for the audience.

**TIMELY** - recurring reports should be received always on time. It is crucial that monthly board reports that contain performance information are ready and available when they are needed. Even better if all reports are available on demand and the most important ones are scheduled for automatic delivery.

**CONCRETE** - it should contain needed information. For example, monthly board reports should contain performance information relating to key operational issues, the critical success factors (CSFs), and key performance indicators (KPIs).

**RELIABLE** - People need to trust the data in the report. This requires good data governance and accurate report building. And checking your reports.

**COMPARABLE** - some of the reports like the ones for the board, are performance reports and they cover financial and non-financial aspects of performance. For financial performance, comparing actual data with forecast (budget/plan/rolling forecast), or in some cases, past data (last month/year), is very essential.

**CLEAR** - reports should always be written clearly and simply. Everyday language should be used and jargon or acronyms should be avoided. Avoid adding too much information to a report as people may miss the point.

## **Reporting Rules Worth Following**

#### ![](/uploads/speech-and-audience-1-150x150.png)1\. Know your audience

Every report has a purpose and a specific audience. Identify what questions the report will answer. Make sure the report does that and no more. It’s important that your report is catered to the needs of each receiver.

#### **![](/uploads/data-sheet-150x150.png)2.** **Capture the right data**

Reports and dashboards are only as good as the data behind them. Align metrics with company vision, take your business objectives, set the metrics that measure those objectives and map them to the capabilities of Salesforce CRM. The recommendation is planning reports first and then configure the application by adding custom fields, formulas, and other changes to capture the data you need.

#### **![](/uploads/security-data-150x150.png)3\. Make reports easily accessible**

Once the report is created make sure that all, who should see it and have the interest to see it, have access to it. Choose a clear name and add a helpful description. Or schedule it to get automatically delivered to the right people.

#### ![](/uploads/remote-control-150x150.png)4\. Automate workflow

Automate everything to save time. Salesforce report subscriptions and [Report Sender](https://cloudanswers.com/report-sender/) provide two different ways to schedule and automatically send results to stakeholders and managers. With automation you will have more time to focus on critical projects instead of building the same reports and sending them out over and over.

## **Reports provide visibility**

- If you are running an important initiative, you use reports to present how your project or program is doing.
- If you are facing challenges, risks, issues, then you use reporting to bring this to management’s attention – so you can get the help you need.
- If the team is doing an excellent job, your reports will present this – and get you and the team's attention and appreciation.
- You also need reports to manage team projects better. Reports help you regularly monitor your team’s progress against goals.
- Regulators, auditors, senior management – all of them look for reports to understand progress against goals and targets.

## **Conclusion**

Reports can provide insight at all levels of the company. So why not improve your reports today? Reports and dashboards are designed to be iterative – it is important to keep them current and relevant. To successfully roll out business metrics good communication is key. Make it easy for your users to find, view, and access the dashboards relevant to them. Then see how much your business transforms.

Check also other articles that are related to :

[Run Salesforce reports in Apex](https://cloudanswers.com/run-salesforce-reports-in-apex/)

[7 Popular Reporting Apps for Salesforce](https://cloudanswers.com/7-popular-reporting-apps-for-salesforce/)

[How To Make Your Salesforce Reports Run Faster](https://cloudanswers.com/tips-for-faster-reports/)

### **CloudAnswers provides free apps that help you work faster and more efficient with Salesforce**

### [**Check it now!**](http://www.cloudanswers.com)

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Reports are needed to understand the data you have in Salesforce or any other CRM. But how the report should be built might be challenging.

salesforce-reporting-tips-and-best-practices

Salesforce - Reporting Tips and Best Practices


## Salesforce Report Subscription Limitation and Report Sending limitations. How to walk around them?

**Salesforce** dominates the CRM market, that is a fact. It is powerful, customizable, scalable, all this to meet the needs of a diverse range of businesses.

One of the most valuable features Salesforce provides is the ability to report on data points that matter to users on various levels. **Reporting and analytics** drive informed decision-making at organizations. Executives rely heavily on reported information and leverage metrics to best support their organization’s strategy.

But the truth is that Salesforce has some limitations in creating, scheduling, and sending the reports, which for most organizations is a very essential part of the business cycle.

## In short, the challenges of reporting within Salesforce are:

- Subscription is limited to only 5 reports per user, 200 reports per organization monthly
- You can’t send one report right now in Salesforce, you only can schedule it for recurring delivery
- It is not possible to send an explanation (email text or note) with the report
- You can’t send the report as an attachment
- To view the report, logging into Salesforce is mandatory
- There is no possibility to send the reports to non-Salesforce users
- Reports are sent even when there is no data (zero records)

Gone are the days when Sales Managers can afford to be reactive, producing, and distributing backward-looking reports within a siloed Sales department.

Today’s leading Sales and Marketing Managers are proactive, strategic, and collaborative; they work alongside leaders from across the organization to continuously improve sales and business outcomes. That’s why the demand for powerful [**Salesforce** reporting tools](https://cloudanswers.com/report-sender/) is so high.

Imagine the situation, you are head of sales and at the board meeting, the CEO is asking you to share with all participants (including business partners) a quarterly sales report. Should be easy, right?–  Well in Salesforce it is not possible to send one report instantly to recipients without a licensed Salesforce account.

## There is a solution for all the above mentioned difficulties.

[Report Sender](https://appexchange.salesforce.com/appxListingDetail?listingId=a0N30000000pvspEAA) is an app created specifically for overcoming these challenges in Salesforce CRM, available on the Salesforce [AppExchange.](https://appexchange.salesforce.com/appxListingDetail?listingId=a0N30000000pvspEAA)

Report Sender allows you to select any of your Salesforce reports in CSV or excel file format, it enables you to customize the email message body and subject, to send out reports to any external email address on a regular schedule. So you are empowered to keep full control over your reports, just the way it should be.


Report Sending limitations in Salesforce. Find out how to walk around Salesforce Report Subscription Limitations. Challenges in reporting.

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Avoiding Salesforce Report Subscription Limitations

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