Imagine we have $10,000 MRR. Now, we close a customer worth $500&#x2F;month, but he pays annually, so we granted him a 1 month discount ($500x11=$5,500). Do we now:<p>- add the discounted $5,500&#x2F;12 = $458.33 to the MRR - add $550 to the MRR (because that&#x27;s the plan the customer is on) - add $5500 to the current month&#x27;s MRR - leave the MRR untouched<p>We used to go with the first solution (as it seems* the most &quot;fiscally conservative&quot;), but the problem is that we have a huge number of customers paying annually (roughly 80%), and our MRR does not account for that. So we report $10,000 MRR, but there will be only coming $2,000 actual bucks in the next month, because all the other customers are on annual plans (and that revenue may already be spent etc.). Makes calculating a burn rate and reporting to investors difficult. (&quot;Why do you need $100,000 for a 6 month runway when you have $10,000 MRR?&quot; - &quot;Well, because we already got $80,000 in pre-payments and spent it.&quot;)<p>Is there another way to go or should I report a different metric?
Ask HN: How to account for annual prepayments in SaaS startups MRR?