High-growth SaaS companies have to be rigorous in their planning. They need to allocate resources strategically. They need to be able to quickly run different scenarios in order to understand the impact of changes to their business. 

For example, you are the CFO of a SaaS business. You’d like to update headcount and ARR under contract models to reflect Q1 actuals. You need to incorporate revised pipeline forecasts from sales. What does this mean for your Q4 cash position? In the world of SaaS, this one “small” change triggers a waterfall of updates consuming hours, days or even weeks. That is time you simply do not have. 

As with many businesses, SaaS companies rely on Key Performance Indicators (KPIs) to understand how the business is performing. But what KPIs should you be tracking?

10 KPIs for SaaS businesses

Here are 10 KPIs you should track:

1. 1. Customer Churn Rate – The percentage of customers lost in a given time
2. 2. New Buyer Growth Rate – The speed at which you gain new customers over defined periods of time
3. 3. Lifetime Value – The revenue from a customer over the retention time period
4. 4. Customer Acquisition Costs – The amount of money a company speeds to get a new customer
5. 5. Net Burn Rate – The Net Cash spent in a specific time frame (usually monthly or normalized to a year)
6. 6. Runway – The time that a startup has before they run out of finances
7. 7. Average Revenue Per User (ARPU) – The average revenue generated per customer (either monthly or annually)
8. 8. SaaS Quick Ratio – This compares revenue added (new business) vs revenue lost (churn)
9. 9. Monthly Recurring Revenue (MRR) – This is the monthly revenue from customers with a subscription
10. 10. Total Addressable Market (TAM) – The market size of a product/service in value that the company can achieve

Workday Adaptive Planning is a strategic resource to help you uses up to date data to drive your KPI models. 

How SaaS Companies use Workday Adaptive Planning

• Subscription waterfalls – forecast new and renewal ACV/ARR, retention and churn by segment
• Sales rep productivity – plan sales rep capacity, quota coverage and territories
• Cohort modeling – model subscriber cohorts, retention, lead conversion and contract ramping
• Professional services – plan bookings, backlog hours, billing rates  and utilization by role
• 606 revenue and commissions amortization – model complex revenue and commission amortization profiles based on contract duration
• Workforce planning – plan and reconcile head count plans to manage a growing workforce
• Vendor-level spend – budget and actualize IT, consulting, marketing and other material expenses at the vendor level

Read more from this series:

Workday Adaptive Planning in Use: A Fireside Chat with Ben Hart, CFO of Texans Credit Union

Workday Adaptive Planning Customers See 249% ROI

Unlocking Success: Harnessing Customer Satisfaction Metrics with Workday Adaptive Planning