Accurate expense coding is critical to building a clean SaaS P&L that drives investor confidence, valuation discussions, and clarity in internal metrics. In episode #303, Ben Murray explains exactly where SaaS operators should code executive-level expenses (CMO, CRO, VP of Services, CFO, etc.) and why coding accuracy is a non-negotiable for both SaaS metrics and investor metrics.

Ben also highlights the common mistake of letting G&A become a dumping ground, which can distort key financial metrics, including your gross profit margin, OpEx profile, and overall SaaS valuation.

What You’ll Learn:

• Where to code executive salaries and expenses in your SaaS P&L
• Why department-level cost centers (Sales, Marketing, Services, etc.) are crucial for accurate SaaS metrics
• How misclassifying expenses can hurt your valuation and confuse investors during due diligence
• The golden rule: G&A should not be a dumping ground
• Tips on ensuring your bookkeeping process supports clean financial reporting

Why It Matters for SaaS Operators & Investors:

• Accurate SaaS P&L structures are essential for clean reporting to boards and investors.
• Incorrect coding can skew key investor metrics like gross margin and operating expense ratios.
• A well-coded SaaS P&L provides the foundation to benchmark your business, manage spend, and maximize company valuation during fundraising or exit processes.

Resources Mentioned:

How to Properly Structure Your SaaS P&L (Blog Post + Example Template)

Quote from Ben:
“As a CFO, G&A isn’t a catch-all—it should only hold true G&A costs. Every expense needs to follow the people creating it.”

You’ve added new ARR—but are you spending too much to get it? In episode #302, Ben Murray walks through two practical ways to align your ARR growth with your sales and marketing spend. If you're unsure whether you're underinvesting, overspending, or just inefficient, this episode will help you benchmark your GTM motion using real data and operator-friendly metrics.

What You’ll Learn

• Two ways to triangulate S&M spend relative to ARR
• OpEx profile: Sales & Marketing spend as a % of revenue
• Cost of ARR: Spend required to acquire $1 of net new ARR
• Why relying on benchmarks without context (like ACV or price point) can mislead your analysis
• The difference between investment level and go-to-market efficiency
• Where to find benchmarks by ACV stage using Benchmarkit.ai (Ray Rike’s dataset)

Why It Matters

• Your sales & marketing efficiency plays a critical role in sustainable SaaS growth
• Proper benchmarks help you avoid overspending—or underinvesting—in growth
• Helps investors and operators answer: “Is our GTM engine working?”

Resources Mentioned

Cost of ARR Blog Post + Template: https://www.thesaascfo.com/saas-cac-ratio/

Benchmark data: Benchmarkit.ai

Quote from Ben

“I love the Cost of ARR—because whether your ACV is $500 or $50,000, it normalizes efficiency across go-to-market models.”

Does your retention data feel off—or even meaningless—because of catch-up invoices, credit notes, or daily revenue recognition? In episode #301, Ben Murray explains how proper revenue recognition practices can sometimes interfere with clear retention reporting and what SaaS operators can do about it.

Learn how to build a pro forma MRR schedule that strips out accounting noise and gives you clean, consistent retention metrics you can actually rely on.

What You’ll Learn

• Why revenue recognition can distort retention metrics, even if your accounting is correct
• The difference between GAAP-based MRR and a pro forma MRR schedule
• How Ben built and used a pro forma model during a private equity exit process
• How to build your own pro forma MRR schedule using invoice data
• The critical role of invoice data as your source of truth

Tools & Resources

BackOfficeTools App: Upload your invoice data and generate retention metrics. Check out the tutorial here to learn more and sign up: https://www.thesaasacademy.com/offers/zz3ZR2WL

Key Quote from Ben

“We still follow proper revenue recognition, but when it comes to retention, sometimes we need a second view. A pro forma MRR schedule helps us cut through the noise.”

RPO—Remaining Performance Obligations—might not be a term you hear often in private SaaS, but public companies are required to disclose it, and it’s becoming a critical forward-looking metric. In episode #300, Ben Murray breaks down the RPO concept, how it's calculated, and why it matters in understanding your future revenue.

Whether you’re preparing for due diligence or just want a stronger grip on your revenue story, understanding RPO can give you an edge.

• What “Remaining Performance Obligations (RPO)” means in SaaS

• How RPO connects to deferred revenue and unbilled contract amounts

• Why RPO is considered a forward-looking visibility metric

• Real-world RPO definition from Snowflake

• When RPO might apply to private SaaS companies — especially with multi-year deals

• A rising RPO often signals strong future revenue durability

• Adds context to your SaaS metrics

• Valuable in due diligence, PE conversations, and strategic exits

• Blog Post: Deep dive on RPO with real-world examples and use cases: https://www.thesaascfo.com/understanding-remaining-performance-obligations-in-saas/

How do usage-based SaaS companies convert transactional or variable revenue into Annual Recurring Revenue (ARR)? Episode #299 gives you a practical framework for presenting usage-based ARR to your Board, investors, and internal teams with clarity and confidence.

After manually reviewing hundreds of public filings and investor materials, Ben Murray breaks down the real-world methods used by companies like Confluent and Datadog to turn usage into ARR.

• The most common method for usage-based ARR

• The second most common method

• How these methods compare to traditional MRR x 12 for subscription models

• Why ARR is often used as a North Star Metric and how transparency is improving across SaaS companies.

• Webinar Replay & Slide Deck (~59 slides):
  Get definitions, examples, and real ARR formulas from leading SaaS companies: https://www.thesaasacademy.com/offers/zz3ZR2WL

“Over 100 hours of manual research. I tried using AI—OpenAI couldn’t handle it. I had to read the filings myself. These ARR methods are backed by real-world data from public SaaS companies.”

In episode #298 of SaaS Metrics School, Ben Murray dives deep into one of his favorite metrics: ROSE – Return on SaaS Employees. If you’re aiming to build a durable SaaS business or position your company for a private equity exit, this episode is a must-listen.

Ben explains why ROSE is far more insightful than traditional Revenue per FTE and how it helps evaluate organizational efficiency by factoring in the actual investment made in your people—including fully burdened employee and contractor costs.

• What the ROSE metric is and how to calculate it

• Why ROSE is better than Revenue per FTE for SaaS businesses

• What a “good” ROSE looks like

• Real-world example of a SaaS company that exited to private equity

• How ROSE contributes to achieving the Rule of 40

• Why you need to track and forecast ROSE monthly

Call to Action!

Grab my ROSE Metric template and the high-performance example here: https://www.thesaasacademy.com/pl/2148690725

In episode #297, Ben Murray tackles a common SaaS metrics question: How should reactivations be treated when calculating gross and net revenue retention (GRR & NRR)?

Key takeaways:

• Reactivated customers (e.g., those who churned quickly but later update payment info) should not be included in new revenue — doing so skews CAC and CAC payback metrics.

• Gross Revenue Retention (GRR) only accounts for contraction and churn — reactivations don’t belong here.

• Net Revenue Retention (NRR) is where reactivations should be recorded — they’re essentially recovered revenue from existing customers.

• SaaS companies with high first-month churn (e.g., due to onboarding issues) may consider calculating an adjusted retention metric.

Ben also highlights his new AI chatbot on TheSaaSCFO.com — trained on his blog content for instant SaaS finance answers.

Level up your SaaS knowledge here: https://www.thesaasacademy.com/

Have you ever seen a public company restate its ARR? In episode #296, Ben Murray dives into a real-world example from the London Stock Exchange—Celebrus Technologies—and unpacks why and how they updated their Annual Recurring Revenue (ARR) definition.

Key Highlights:

• Financial restatements ≠ just GAAP: ARR, a non-GAAP metric, is increasingly being scrutinized as pricing and revenue models evolve.

• Case Study: Celebrus Technologies

  • Old ARR definition: Included license revenue, cloud, support & maintenance, third-party software licenses, and project revenue (i.e. services).

  • New ARR definition: Focuses solely on Celebrus software licenses and managed services—excluding third-party licenses and project revenue.

• Why the change?

  • To better align with how peers in their sector define ARR.

  • To give investors a “cleaner” view of core recurring software revenue.

• Impact of the change: ARR restated downward and now reported at 18.8M (FY25).

• Ben’s take: This is a positive trend. While managed services are still debatable as “recurring,” overall transparency in ARR definitions is improving across public SaaS companies.

Bonus Insight:
ARR restatements, especially when they lower reported revenue, are rare—but this signals a maturing investor focus on true recurring revenue quality.

Upcoming Webinar:
Join Ben Murray and Ray Rike on July 17 as they explore how public SaaS companies are defining and calculating ARR.

>> https://thesaascfo.webinarninja.com/live-webinars/10693368/register

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