ARR reporting is never one-size-fits-all
One-size-fits-all reporting tools are like square pegs jammed in round holes. They kind of work, but they really don't. When it comes to ARR reporting, you want a custom fit.
If you’re a 90s kid like me, you might remember walking into the mall, and one of the first stores you’d pop into was Lids to scan row upon row of endless hats.
If you’re even more like me, you’d skip all the snapbacks and the one-size-fits-all hats. Those were the types you’d get as gifts from aunts and uncles–ones that knew you liked hats but didn’t know hats.
At the risk of sounding like a complete brat, the one-size-fits-alls were the worst. They never quite fit right. They bunched up. The elastic might fit around your head, but they were too tall or not tall enough. And forget snapbacks; they made you look like you were 7. You’d spend the entirety of your time scanning the wall of New Era fitted hats. They fit different.
After careful experimentation, I knew my size: 7 and 3/8ths (when my hair was short). Not only did they look better, but all the pros wore them—for a reason. ARR reporting is no different.
It’s time for a New Era.
There are two origin stories behind Equals.
The first is the Daily Pulse, a simple report that fundamentally changed Intercom's culture and trajectory. It was no more complicated than a set of charts that’d go out every day to the entire company, sharing a few key metrics, including how much new ARR we’d booked the day before and how much we had expanded, contracted, and churned. It completely altered the company’s awareness of how we were performing. We do something similar now at Equals and I encourage every startup to have their own “Daily Pulse”.
The second is the “Weekly Forecast Review”. Every Friday, while everyone was getting excited for “Desk Beers” to be announced at 4 pm on the dot in Slack (thanks,
), I was heads-down scrambling to pull together a summary of the entire business and the forecast of where we were pointed. It was a hot mess trying to grapple with Excel files and endless SQL queries, the most daunting being the multi-thousand-line query I’d cobbled together to pull ARR. It was painful to get to that point and maintain it because nobody else in the company knew how it worked. It was a total mess. The stuff of nightmares.
Everything comes back to ARR
I’m convinced that Annual Recurring Revenue is the glue that holds all reporting within a SaaS business together. And I’m convinced because everything ultimately points back to the need to answer, “Is a user paying us? How much? For how long? And on what plan?”.
That’s why making ARR reporting accessible and easily understood is the most critical job of any first finance hire at a SaaS company. It permeates product analytics, marketing analytics, and sales analytics. And it’s what investors and your board will care about most (see the story of Intercom’s last board meeting before I joined).
Despite its criticality, ARR reporting is no better or easier today than ten years ago when I was standing it up at Intercom. And even if you use Stripe, which most of you likely do, it’s still a total nightmare. It’s shocking how difficult it remains.
The truth is that it’s relatively easy to get ARR reporting somewhat accurate. But it’s really hard to get ARR reporting completely accurate.
One-size-never-fits-all
Products like Baremetrics existed in the Intercom days, too. But, like our favorite Lids, one-size-fits-all tools don’t cut it. Every business is different. Every business is unique. How you’ve configured Stripe or any other billing platform matters. But more importantly, how you want to look at your business matters most.
Do coupons matter? When do you want to count a new customer, when they pay, receive their invoice, sign a contract, or at another point? Do you offer services, and how do those count towards ARR? Do you have overages to your contract, and how do you want to count them? There’s a long list of logic you need to unravel and articulate before you can even start.
After months of work, you may have ARR reporting that works–for at least a few weeks. But it’s not long before you’ll change something in your business, and it’ll break (again). Or, more likely, you’ll get a question like, “Oh, that’s interesting that gross new ARR is up. What campaigns are driving that?” and you’ll have no ability to answer it because your one-size-fits-all tool isn’t connected to the tool you need to answer it.
If you’re a serious company with serious investors, a board, and aspirations of scaling, you need ARR reporting that is correct—completely correct—and connected to where all your other data lives.
Finding the right fit
The most paralyzing moment in my role at Intercom was when I had to make the leap from “Hey, I have ARR reporting that (kind of) works for me” to “We need a system that the rest of the company can use to report on ARR and inform their own analysis.”
I had no idea what that should look like, how it should be architected, or where to even start translating the behemoth of a script I’d written into something that others could use.
Thus began an 8-year journey of trying to figure this out. I made many mistakes along the way but got a few things right. Like hiring some fantastic people onto the team, including
, who’s now with us at Equals. He cleaned up many of the messes I made and was ultimately the mastermind behind where our reporting ended up.For the past three years we’ve been busy building the product I wish I’d had in the Intercom days. Today, we launched the service to match it so you can get the best of both worlds.
Get your custom fit
We’ve taken decades of collective experience implementing and scaling ARR reporting for Intercom and many other Equals customers and built a system to create custom-fit ARR reporting for any SaaS business.
ARR reporting with Equals and Stripe data is for any founder or first finance hire who wants ARR reporting to be the growth engine it was for us at Intercom and who wants to exceed the expectations of their investors and board members. It will save your team months of time and hundreds of thousands of dollars in implementation–seriously.
If you need more convincing as to why ARR reporting is complex and why it matters to get it right, or if you feel like having a crack at it yourself, you’ll want a copy of our new book, The Ultimate Guide on ARR.
May the ARR be with you.