Understanding the distinction between Billings and Monthly Recurring Revenue (MRR) is key to accurately tracking your financial performance in Recurly. While both report on revenue, they do so from different perspectives.
Billings Report: The Billings report provides a straightforward account of the actual cash flow – it reflects the number of payments successfully received from any processed invoice (money "in the door") or money paid out through refunds (money "out the door"). It's a record of realized transactions.
Monthly Recurring Revenue (MRR): MRR is a predictive metric that estimates your consistent, normalized monthly revenue from active subscriptions. Here's how it works:
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Daily Calculation: Every day, Recurly identifies and sums up all recurring charges from subscriptions that are currently active (i.e., within their billing cycle). This allows you to see your predictable monthly revenue at any given point in time.
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Normalization: For charges that span longer than one month (e.g., yearly plans), Recurly normalizes these charges to a monthly equivalent by dividing the total recurring charge by the number of months it covers (e.g., a yearly plan's charge is divided by 12).
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Monthly View: The monthly view of MRR simply represents the total MRR calculated on the last day of that specific month.
Example:
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An invoice for a subscription worth $100 paid on January 15th will show as + $100 in the Billings report when the payment is successfully processed.
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That same $100 charge on the invoice has a defined service period (e.g., January 15th to February 15th). This time range represents its monthly billing cycle. This subscription will contribute $100 to MRR. On any day within that service period (January 15th - February 15th), if you look at your MRR, you will see this subscription contributing $100 to your predicted monthly revenue.
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