The Unit Economics of an Inside Sales Strategy at a SaaS Company
By Eric Mersch
The typical Small and Mid-Market SaaS company will use a portfolio of sales strategies designed to fit the average Annual Contract Value (ACV) of the sale. The most common strategies are Direct Sales, Inside Sales, eCommerce Marketplaces, and Partnerships. Some SMM companies may use all four depending upon their business…Read More
Read MoreThe Remaining Performance Obligation (RPO) SaaS Metric
By Eric Mersch
The Remaining Performance Obligation (RPO) reporting requirement arose from adopting ASC 606. This SaaS metric is defined as the sum of Deferred Revenue and Backlog. Deferred Revenue for SaaS companies is the non-cancellable contractual obligation to deliver the SaaS product for the period invoiced. The term Backlog refers to future…Read More
Read MoreUnderstanding Financial Reporting for SaaS Companies
By Eric Mersch
Summary In a growing trend, companies increasingly seek to educate their employees on financial reporting and incorporate an understanding of financial metrics into the company’s culture. Over the past twenty some years, the adoption of systems and collection of internal data generated within companies has grown exponentially. Today more than…Read More
Read MoreCalculating Gross Margin for Enterprise SaaS Businesses
By Eric Mersch
In my experience, many Enterprise SaaS companies struggle with reporting gross margin due to lack of guidance on this topic. FASB refers to gross profit as the difference between revenue and cost of revenue. SEC Regulation S-K provides more detail, defining gross profit as “net sales less costs and expenses…Read More
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