Tool

Recurring revenue counter: four readings from one services ledger

Four readings of your recurring share from one ledger and one period, with the spread between them.

The methodThe recurring revenue ladder: four rungs

Ships with How to count recurring revenue in a services business, four ways, and is available on its own.

The recurring revenue counter is an interactive tool that takes one ledger and one period and reads your recurring share four ways: contracted annuity, product line, planning model and management-accounts actual. It shows the spread between the highest and the lowest reading. That spread is the size of the story a services business is telling itself about its recurring revenue, and the narrowest reading is the one a buyer's diligence will count. The counter does not tell you which reading to categorise (categorize) as the truth. It shows you all four.

The inputs are the revenue lines for the period, each tagged with its contract type and term, the product line it sits under, and whether the planning model counted it as recurring. The counter also takes the same tags for the prior period, so it can run the relative-growth test and flag the forbidden reading: a share that rose because a definition widened between years, not because a customer committed to anything.

The outputs are four percentages from the same ledger, the spread between them, the relative-growth test, and a flag on any taxonomy change. A worked example ledger is loaded; it is invented and labelled as invented.

In the business that became DevOpsGroup we built a managed service and never shifted the mix as far as we intended, and I knew which of the four numbers was true every month. The counter is in development and comes with its playbook, How to count recurring revenue in a services business, four ways. The waitlist is open.

What you will get

Who it is for