11/ Larger companies have complicated computer programs which handle revenue recognition, often on a per-day basis over contract term. Yep.
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Replying to @patio11
12/ My favorite example is virtual goods, where GAAP says you have to pro-rate revenue for e.g. a magic sword over expected avg player life.
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Replying to @patio11
13/ ACV means annual contract value or average contract value. Chiefly in SaaS it quickly communicates your market and sales strategy.
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Replying to @patio11
14/ If you say ACV $250 / $5k / $50k / $1.5 million then SaaS folks can pretty much draw out your entire org chart using only that info.
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Replying to @patio11
15/ For example, if your ACV is in the $50k+ budget, I will bet dollars to donuts that Sales is bigger than Engineering and has more pull.
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Replying to @patio11
16/ LTV (lifetime value) is a *prediction* of average revenue (across all customers or a segment) over customer lifetime.
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Replying to @patio11
17/ LTV is really easy to estimate (average billing per interval divided by churn per interval). It should be tattooed on your consciousness
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18/ LTV lets you make consequential decisions about e.g. ad spend (rule of thumb: cost of acquisition < 1/3 LTV => good), sales effort, etc.
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Replying to @patio11
19/ Think that's it for the moment. Have questions? Fire away.
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@gregrobertson For revenue, one should report 1/12th prorated over each of the twelve months of the contract.
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Replying to @gregrobertson
@gregrobertson On a cash basis you record it whenever it physically enters your control. Even as cash basis biz, recommend not for dashboard1 reply 0 retweets 0 likes - 4 more replies
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