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Annualizing Earnings Best Practices

 

"What's your view on annualizing bookings (if it's a 6 month deal of $10k, reflecting and reporting ARR as $20k)?"

This question was asked at a recent webinar, now available on-demand:

"Why Companies Need a Bookings Policy, and How to Create One"

Please add your thoughts about it below. Thanks!

Answers

Mike Murphy
Title: Chief Business Officer
Company: goTransverse
(Chief Business Officer, goTransverse) |

It depends on your classification. if you report in terms or arr and your contracts generally renew, then i think it makes sense to reflect this as arr and if a customer does not renew, then you would show the impact as churn. however if your business in monthly or seasonal, then you may wan to consider using a different metric like CMRR.

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