Accounting Churn Rate Calculator
Calculate customer and recurring revenue churn to track how much business your company loses during an accounting period.
Overview
This accounting churn rate calculator estimates the proportion of customers and recurring revenue lost during a month, quarter, or year. Enter your opening customer count, customer losses, new customers, and recurring revenue figures to review retention and end-of-period customer movement.
How it works
Customer churn rate equals customers lost divided by customers at the beginning of the period, expressed as a percentage. Customer retention is the remaining percentage of the opening customer base. The ending customer estimate starts with opening customers, subtracts losses, and adds new customers. Recurring revenue churn uses the same approach, dividing recurring revenue lost by recurring revenue at the start of the period. New sales and expansion revenue are not used to reduce these gross churn measures.
How to use this calculator
- 1Select the reporting period that matches your records.
- 2Enter the number of active customers at the start of the period.
- 3Add the customers lost and new customers during the period.
- 4Enter opening recurring revenue and recurring revenue lost.
- 5Review customer churn, retention, revenue churn, and estimated ending customers.
Example Calculation
Reporting period
monthly
Customers at start of period
500
Customers lost
25
New customers acquired
40
Starting recurring revenue
$50,000
Recurring revenue lost
$3,000
Customer churn rate
5.00%
With 500 opening customers and 25 lost customers, customer churn is 5.00% and retention is 95.00%. Adding 40 new customers gives an estimated ending total of 515 customers. Lost recurring revenue of 3,000 from an opening 50,000 produces revenue churn of 6.00%.
Frequently asked questions
What is customer churn rate?
Customer churn rate is the percentage of customers from the opening customer base who stop doing business with you during a reporting period.
How is churn rate calculated?
Divide the number of customers lost during the period by the number of customers at the start of the period, then multiply by 100.
Do new customers reduce churn rate?
No. Basic or gross customer churn measures losses from the opening customer base. New customers affect ending customer count and net growth, not gross churn.
What is the difference between customer churn and revenue churn?
Customer churn counts lost customer relationships. Revenue churn measures the recurring revenue lost from cancellations, non-renewals, or downgrades.
Should downgrades be included in recurring revenue lost?
They can be included when you want revenue churn to reflect reductions in recurring spend, provided you apply the same policy consistently in each period.
What is a good churn rate?
The appropriate level varies by industry, contract length, customer segment, pricing model, and business maturity. Comparing consistent periods and cohorts is usually more useful than relying on one benchmark.
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Assumptions and warnings
Assumptions
- Customer churn is calculated using customers at the start of the selected reporting period.
- New customers are shown in the ending customer estimate but do not offset customer churn.
- Recurring revenue churn is based on lost recurring revenue divided by recurring revenue at the start of the period.
- Results are operational estimates and depend on consistent customer and revenue classifications.
Warnings
- This calculator provides an estimate for management reporting and is not financial or accounting advice.
- Use the same reporting period, customer definition, and revenue-recognition basis for all inputs.