Ask HN: How do you report annual packages in startup RMR?

2 pointsrochm5y ago2 comments

Ok, say you have 2 plans, monthly and annual. Annual you provide with a discount.

So say you charge either $100 monthly or $1000 annually. Someone buys the $1000 package in January and pays up front.

How do you report the RMR to your investors?

Do you include the whole $1000 into the RMR for January, or.. do you report $83,33 (1/12) every month for that annual package?

I am having that issue now in EmployPlan.

Do you see any differences between countries in that regard?

2 comments

As you said: for MRR you simply divide the annual amount by 12. https://baremetrics.com/academy/saas-calculate-mrr (in the "common mistakes" section, first item).

Talk to your accountant.

This is not a productive use of your time.

The potential cost of getting it wrong (aka "dumb tax) is exponentially larger than the cost of professional expertise.

There's tax liability.

There's fraud liability.

There's opportunity cost because this isn't making you money.

Good luck.

j / k navigate · click thread line to collapse