Description:

Subscription revenue that is split to the months when the service is delivered. The splitting is called ‘normalization’.

Use:

Used to calculate Monthly Recurring Revenue (MRR).

Why is it needed:

You may have received subscription revenue in advance.
Normalization prevents these problems:

• You may think that your SaaS has started to grow faster, when there are more prepayments
• You may think that your SaaS is doing worse when no revenue gets collected in that month

Also Called:

Recurring Revenue (RR)