Annual Recurring Revenue, or ARR, is an insightful metric for B2B SaaS businesses to track the total dollar amount that comes in every year for the duration of a customer’s annual contract. No matter the size of your company or industry, ARR is a universal metric that gives businesses the most insight about the success of their business.
How to use Salesforce Data to Track ARR
While there are a ton of articles about which metrics to track, and while each SaaS company’s metrics may differ, ARR is still the most important metric.
ARR is the backbone to our executive KPI dashboard because it can be used within various other key metrics across your organization to report on things like growth from new contracts, expansion from existing customers, trends in average contract value and runway.
Calculating ARR doesn’t have to be difficult. You can easily do this by analyzing your CRM data. In the video below, we’ll show you how to track ARR using Salesforce data.
We’ll be using the Opportunities table for this chart
Just drag Opportunity Amount to measures and choose total sum, which shows the total contract price excluding license and maintenance fees
To make sure we are only seeing the amount from actual paid accounts, drag the Stagename into Filters and choose equals Closed Won
And that’s it, two simple steps and you’ve got an ARR chart to help you calculate the success of your business in actual dollars.
While ARR definitions can vary, as you define ARR for your organization, it’s important to clearly communicate this to stakeholders and across your organization so everyone can use and understand ARR correctly.
For more insights on how to leverage data to manage and understand your sales pipeline, read more success stories from Sales teams here. To get even more business insights, learn how to create your own CEO dashboard.