Accounting Monthly Recurring Revenue (Per-Unit) Calculator
Calculate monthly recurring revenue from active billable units, the monthly price per unit, discounts, and recurring credits.
Overview
This Accounting Monthly Recurring Revenue (Per-Unit) Calculator estimates recurring monthly revenue from the number of active billable units and the monthly price for each unit. It also accounts for average recurring discounts and monthly credits to show a net MRR estimate and annualized run rate.
How it works
The calculator multiplies active billable units by the monthly price per unit to find gross monthly recurring revenue. It subtracts the average recurring discount amount and recurring monthly credits to estimate net MRR. Net MRR divided by active units gives average net revenue per unit, while net MRR multiplied by 12 gives the current annual recurring revenue run rate.
How to use this calculator
- 1Enter the number of active units that are billed each month.
- 2Add the standard monthly recurring price for one unit.
- 3Enter the average recurring discount rate, if any.
- 4Add recurring monthly credits or concessions that reduce revenue.
- 5Review net MRR, revenue per unit, and the annualized run rate.
Example Calculation
Active billable units
100
Monthly price per unit
$50
Average discount rate
10%
Monthly recurring credits
$100
Net monthly recurring revenue
$4,400.00
Gross MRR is $5,000. After a 10% recurring discount ($500) and $100 in recurring credits, net MRR is $4,400, or $44 per active unit. The annualized run rate is $52,800.
Frequently asked questions
What is monthly recurring revenue per unit?
Monthly recurring revenue per unit is the average recurring monthly revenue generated by each active billable unit after the reductions included in the calculation.
What should be included in active billable units?
Include units that are currently entitled to recurring service and expected to be billed for the month. Exclude inactive, free, trial, or one-time units unless they generate recurring charges.
Are one-time setup fees included in MRR?
No. MRR generally focuses on recurring subscription or service revenue. One-time setup fees, implementation charges, and other non-recurring items should be tracked separately.
What is the difference between gross MRR and net MRR?
Gross MRR is the recurring revenue before discounts and credits. Net MRR is gross MRR after subtracting recurring discounts and recurring credits entered in the calculator.
Is annual recurring revenue the same as recognized annual revenue?
Not necessarily. This calculator annualizes the current net MRR by multiplying it by 12. Recognized revenue can differ because of contract timing, performance obligations, refunds, and accounting policies.
How often should I update per-unit MRR?
Update it whenever active units, recurring prices, discounts, or recurring credits change. Many businesses review MRR monthly and monitor changes more frequently.
Explore Related Calculators
Assumptions and warnings
Assumptions
- All active billable units are billed for a full month at the stated recurring monthly price.
- The discount rate represents the average ongoing discount across the active units.
- Recurring credits reduce monthly recurring revenue; one-time charges and one-time refunds are excluded.
- Annual recurring revenue is a run-rate estimate based on the current month's recurring revenue.
- Results are estimates and may differ from revenue recognized under your accounting policies.
Warnings
- This calculator provides a revenue estimate only and is not accounting, tax, or financial advice.
- Revenue recognition may differ from billed recurring revenue depending on contract terms, refunds, collections, and applicable accounting standards.