Short answer
MRR is normalised recurring revenue at a point in time and ARR is MRR times twelve. Neither equals accounting revenue, which is recognised as service is delivered. Investors want both, plus a bridge that explains the difference.
Tech and SaaS accountants
MRR ARR accounting SaaS
How MRR and ARR relate to statutory revenue for UK SaaS companies, how to define them consistently, and how to report both without confusing investors.
Short answer
MRR is normalised recurring revenue at a point in time and ARR is MRR times twelve. Neither equals accounting revenue, which is recognised as service is delivered. Investors want both, plus a bridge that explains the difference.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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MRR is normalised recurring revenue at a point in time and ARR is MRR times twelve. Neither equals accounting revenue, which is recognised as service is delivered. Investors want both, plus a bridge that explains the difference.
01
Defining MRR so it stays honest
02
The movements that matter
03
Bridging to the accounts
Defining MRR so it stays honest
Include recurring subscription revenue normalised to a month. Exclude one off implementation fees, usage overages unless genuinely recurring, and professional services. Annual plans are divided by twelve rather than counted on billing. Definitions drift is the most common cause of a metric that quietly stops meaning anything.
The movements that matter
New, expansion, contraction and churned MRR explain the month far better than the net figure does. Net revenue retention above 100% means the existing base grows without new logos, which is the single metric that most changes how a SaaS business is valued.
Bridging to the accounts
Statutory revenue includes services and non recurring items and follows recognition rules, so it will differ from ARR. We publish both each month with a reconciliation, which removes the awkward diligence conversation where two versions of revenue exist and nobody can explain the gap.
Before you act
Rates, thresholds and deadlines quoted here reflect the current UK position and current HMRC and Companies House guidance. Check GOV.UK, or ask us, before relying on them for your own business.
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Frequently asked
MRR ARR accounting SaaS: questions directors ask
Should usage revenue count in MRR?
Only if it is genuinely stable and recurring. Otherwise report it separately.
Is ARR a GAAP measure?
No. It is an operating metric, which is why it needs a bridge to recognised revenue.
Can you build this reporting for us?
Yes, as part of the monthly management accounts.
Which metrics should management accounts show for mrr arr accounting saas?
Useful reporting commonly includes recurring revenue, gross margin, burn, runway, headcount cost, customer acquisition efficiency and cash collection. The exact set should match the company’s model and the decisions founders and investors make each month.
How should deferred income and revenue recognition work for mrr arr accounting saas?
Cash received in advance is not automatically revenue on day one. The accounting treatment follows what has been delivered under the contract, with the undelivered balance carried forward and reconciled to billing data.
What records are needed for mrr arr accounting saas?
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
How much does help with mrr arr accounting saas cost?
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Can you take over mrr arr accounting saas from another accountant?
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Can mrr arr accounting saas be handled online?
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
Which accounting software works best for mrr arr accounting saas?
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
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