How to calculate your MRR from Exact Online

Your accounting knows exactly what you invoiced last month. What it does not know is how much recurring revenue you have today. The Subscription Management module does show an expected MRR, but not what it is made of or why it changes. That gap costs most subscription businesses half a working day per month. This article shows how to make the calculation, and which choices to fix in advance, because otherwise they quietly disappear into your formulas.

What MRR actually is

MRR stands for Monthly Recurring Revenue: the recurring revenue your customer base represents per month, converted back to one comparable monthly value.

That last part is where it goes wrong. MRR is not a sum of what you invoiced this month. A customer on a €12,000 annual contract that you invoice in January generates €1,000 MRR, every month, including July, when no invoice goes out. And a customer who cancels in March with an end of term in December leaves your MRR in March, while you keep invoicing them until December.

MRR therefore describes the state of your customer base, not the state of your receivables. That is exactly why you cannot read it off an invoice overview.

The method, step by step

1. Pull out your subscription lines

Start from your subscription management in Exact Online, or otherwise from your sales invoices over the period. Per line you need: the customer, the amount, the invoice period and the contract form.

2. Separate recurring from one-off

This is the step most often skipped and the one that pollutes the most. Implementation fees, extra work, invoiced hours, hardware, training: none of these is recurring. They do not belong in your MRR, even when they sit on the same invoice as the subscription.

If the chart of accounts does not get you there, a separate item code or cost centre for subscription revenue is the one-hour investment you earn back every month afterwards.

3. Normalise to a monthly value

Every contract form back to one month:

A customer who pays €2,400 a year and a customer who pays €200 a month are identical in MRR. That is the whole point: you want to be able to lay them side by side.

4. Prorate on a mid-term start or stop

A customer who joins on 18 March at €300 a month does not count as €300 in March. There are two defensible methods:

• Prorate on a daily basis. 14 of 31 days, so €135 in March and €300 from April. Accurate, but it makes your monthly series bumpy.
• Full month from the next month. €0 in March, €300 from April. Coarser, but your series stays smooth and comparable.

Both are fine. What is not fine is using the first method one month and the second the next.

5. Add it up

The sum of all normalised monthly values is your MRR. Your ARR (Annual Recurring Revenue) is that figure times twelve. Not your revenue over the past twelve months, but your current MRR extrapolated.

A worked example

Four customers, end of March:

MRR end of March: €950.

Customer D is the interesting case. You still invoice them until the end of the term, your revenue simply runs on, and in your bookkeeping nothing is amiss. In your MRR they are gone, because MRR describes what your customer base is worth, and D no longer belongs to it.

That is exactly why MRR and revenue diverge, and why one number cannot replace the other.

The choices to fix in advance

There is no reporting standard for ARR, not in Dutch regulation and not under IFRS. Two companies can both calculate correctly and still mean a different number. That is not a problem, as long as you have made your own definition explicit.

In practice that rarely happens. The definition emerges along the way, sits implicit in formulas, and shifts the moment someone resolves an exception. You only notice it during an acquisition, a funding round or a change of management.

These five choices shape your number the most:

1. When does a cancellation count? On the cancellation date or at the end of the term. This determines whether your churn runs months early or late.
2. What do you do with a temporary discount? A customer with three months at 20% off: do you count the discounted price or the contract price? If a discount is booked as contraction, it pollutes your retention figure permanently.
3. What do you do with price indexation? Counting automatic indexation as expansion makes your net retention structurally too flattering.
4. Group customers: one customer or several? This simultaneously sets your customer count, your average revenue per customer and your churn in numbers.
5. When does a paused customer leave your base? On pausing, on payment arrears, or only at collection.

Write the answers down. One page is enough, and it is the only document that stops you having two numbers a year from now that are both called "the MRR".

Why the Excel export does not solve it

At this point you know how the calculation goes. Most businesses then build it once in a spreadsheet, and it works. The first time.

The objection is not the hours, though there are more of them than you think. It is in four properties every manual process has, however carefully you set it up:

• It is out of date the moment it is finished. A file ready on the twelfth describes last month. You are structurally steering on a situation at least four weeks old.
• It is not reproducible. Ask an investor or your accountant how you arrive at your MRR, and the answer is a file with hidden tabs and manual corrections. There is no trail of which correction was made and why.
• It is a person, not a process. The logic sits in formulas one person devised. A holiday or a departure fully interrupts your steering information.
• Every definition change breaks your series. Treat implementation revenue differently halfway through the year, and the comparison with earlier months no longer holds. Recalculating means going back by hand through all prior periods, so it does not happen.

Those four apply regardless of how well the file is built. An excellent sheet has them just as much as a poor one, they simply stay unnoticed there for longer.

And that is where it starts

MRR is the starting point, not the answer. The number on its own does not yet tell you whether you are growing: an MRR going from €140,000 to €141,700 can mean a quiet €1,700 was added, or that €5,000 came in and €3,300 leaked away. Which five movements sit underneath that is covered in this article on the MRR bridge.

That difference is also the subject of the whitepaper The blind spot in Exact Online: why your accounting records those five movements but shows them nowhere, and which four questions tell you within five minutes whether your business has that problem.