Audits · Checklist
SaaS Metrics Hygiene Audit
A fast sweep of whether your core SaaS metrics — MRR, NRR, GRR, CAC, LTV, and more — are actually being tracked and tracked correctly.
About this audit
This is a fast sweep, not a deep dive — it checks whether the core metrics every SaaS business should track (MRR, ARR, NRR, GRR, CAC, LTV, burn, and a few efficiency ratios) are actually being tracked at all, and tracked with a defensible methodology.
Think of it as a pre-flight check before the deeper audits in this series. If a metric here fails, the corresponding dedicated audit or calculator on this site goes into far more depth on how to fix it correctly.
Core Metrics Tracked
Why it matters: MRR is the foundational metric almost everything else in SaaS reporting is built on top of.
Impact: Every downstream metric (growth rate, NRR, CAC payback) inherits any error in MRR.
How to fix: See the MRR Accuracy Audit for a full breakdown of correct MRR calculation.
Automated by Dnoise
Why it matters: Two different calculation paths for MRR and ARR can drift apart over time and produce numbers that don't reconcile.
Impact: Confusing discrepancies between MRR-based and ARR-based reporting.
How to fix: Always derive ARR as Net MRR times 12, from the same underlying MRR calculation.
Automated by Dnoise
Why it matters: An approximated NRR can diverge meaningfully from the real cohort-based number, especially when expansion and contraction are unevenly distributed.
Impact: Reported NRR may not hold up under closer scrutiny, e.g. during fundraising.
How to fix: Calculate NRR from defined customer cohorts, tracking starting MRR, expansion, contraction, and churn per cohort.
Automated by Dnoise
Why it matters: GRR shows the retention floor without expansion masking underlying churn — a healthy NRR can hide a weak GRR.
Impact: Blind spot on whether growth is coming from genuine retention or from upselling a shrinking base.
How to fix: Calculate GRR alongside NRR using the same cohort methodology, excluding expansion.
Automated by Dnoise
Unit Economics
Why it matters: Understating CAC makes acquisition look more efficient than it actually is, and any LTV:CAC ratio built on it will be misleadingly favorable.
Impact: Overly optimistic view of acquisition efficiency and unit economics.
How to fix: Include all sales and marketing spend — salaries, tools, ad spend, content — in the CAC calculation.
Manual
Why it matters: Using revenue instead of profit overstates how much a customer is actually worth, since it ignores the cost of serving them.
Impact: Inflated LTV and correspondingly inflated LTV:CAC ratios.
How to fix: Calculate LTV as ARPU times gross margin, divided by churn rate.
Manual
Why it matters: Payback period is the clearest single number for whether growth is capital-efficient — without tracking it monthly, drift goes unnoticed.
Impact: A slow, gradual deterioration in acquisition efficiency can go unaddressed for a long time.
How to fix: Calculate CAC payback period monthly and track the trend, not just a single snapshot.
Manual
Efficiency Metrics
Why it matters: Runway sets a hard deadline for fundraising or reaching profitability — not tracking it regularly risks discovering the deadline is closer than assumed.
Impact: Less time to react if runway is shorter than expected.
How to fix: Recalculate burn rate and runway monthly using trailing average burn, not a single month's snapshot.
Manual
Why it matters: It's one of the most commonly cited health checks investors use, combining growth and efficiency into one number.
Impact: No easy way to communicate overall business health in the shorthand investors expect.
How to fix: Calculate growth rate plus profit margin at least quarterly.
Manual
Why it matters: It's a standard way to evaluate whether sales and marketing spend is producing proportional new revenue.
Impact: Less visibility into sales efficiency trends over time.
How to fix: Calculate Magic Number as net new ARR divided by prior quarter's sales and marketing spend.
Manual
Formula Consistency
Why it matters: These inclusions inflate reported numbers in ways that won't hold up under scrutiny and can seriously damage credibility if discovered later.
Impact: Reported metrics don't reflect true recurring business performance.
How to fix: Exclude any non-recurring, non-customer-driven inflows from recurring revenue metrics entirely.
Manual
Why it matters: Without documentation, different people on the team (or different tools) can end up calculating the 'same' metric differently, producing numbers that don't reconcile.
Impact: Confusing discrepancies when the same metric is reported from different sources.
How to fix: Write down the exact formula and inputs for each metric in a shared, accessible place.
Manual
Frequently Asked Questions
How is this different from the MRR Accuracy Audit?
This audit checks whether each core metric is tracked at all and roughly correctly. The MRR Accuracy Audit goes much deeper into just MRR specifically — normalization, discounts, failed payments, and more.
Do I need to track every metric on this list?
Not necessarily all at once. MRR, NRR, and CAC are close to universal for subscription businesses. Rule of 40 and Magic Number matter more once you're raising or reporting to investors regularly.
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