INSIGHT

Accounting for Growth Stage SaaS: The Metrics Investors Expect You to Track 

Mark Leverette • November 6, 2025

Services: Outsourced Accounting Industries: Technology

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Growth-stage SaaS companies face a unique challenge when it comes to financial reporting. Your investors don’t just want to see traditional GAAP financials. They expect you to track and report on specific metrics that demonstrate the health and scalability of your recurring revenue model. 

Understanding which metrics matter most and how to accurately track them can make the difference between securing your next funding round and watching competitors pull ahead. This article will cover the essential financial metrics investors scrutinize, why accurate tracking matters, and how the right accounting infrastructure supports your growth trajectory. 

Why Investors Focus on SaaS-Specific Metrics 

Traditional accounting metrics don’t tell the full story for subscription-based businesses. While profit and loss statements matter, investors need to understand how efficiently you acquire customers, how well you retain them, and whether your unit economics support sustainable growth.  

Investors use these metrics to evaluate whether your business can scale profitably. They want to see that you’re not just growing revenue but doing so in a capital-efficient way that demonstrates strong fundamentals. Without accurate tracking and reporting of key indicators, you’ll struggle to build investor confidence or benchmark your performance against industry standards. 

5 Key Metrics Investors Expect SaaS Companies to Track 

1. Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) 

MRR and ARR form the foundation of your financial reporting. These metrics show investors the predictable revenue stream your business generates each month and year. 

Calculate MRR by multiplying your total number of paying customers by the average amount each customer pays per month. Your ARR is simply your MRR multiplied by 12. Most investors expect you to break these numbers down further, showing new MRR from new customers, expansion MRR from upsells, and contraction MRR from downgrades or churn. 

Clean MRR reporting requires accurate subscription data. Your accounting system needs to properly categorize different types of recurring revenue and track changes over time. NetSuite and Sage Intacct both offer subscription management capabilities that help automate these calculations and ensure consistency in your reporting. 

2. Customer Acquisition Cost (CAC) and Payback Period 

CAC tells investors how much you spend to acquire each new customer. Calculate this by dividing your total sales and marketing expenses by the number of new customers acquired during that period. 

The CAC payback period shows how many months it takes to recover your acquisition costs. Investors typically want to see payback periods of 12 months or less for growth-stage companies. A shorter payback period means you can reinvest cash into growth more quickly. 

Your accounting system needs to properly allocate sales and marketing expenses and tie them to customer acquisition data. This often requires integration between your CRM, marketing automation platform, and financial systems to ensure accuracy. 

3. Customer Lifetime Value (LTV) 

LTV represents the total revenue you expect to generate from a customer over their entire relationship with your company. Investors compare LTV to CAC to evaluate whether your unit economics make sense.  

Calculate LTV by multiplying your average revenue per customer by the average customer lifetime, then subtracting the costs to support that customer. A healthy LTV to CAC ratio is typically 3:1 or higher, meaning you generate three dollars in lifetime value for every dollar spent on acquisition. 

Accurate LTV calculations require clean data on customer tenure, expansion revenue, and support costs. Your accounting platform should track these variables consistently and allow you to model different scenarios. 

4. Net Revenue Retention (NRR) 

NRR has become one of the most important metrics for growth-stage SaaS companies. This metric shows investors whether you’re growing revenue from your existing customer base through upsells and expansions. 

Calculate NRR by taking your starting MRR from existing customers, adding expansion revenue, subtracting churn and contraction, then dividing by your starting MRR. Investors look for NRR above 100%, which indicates you’re growing revenue even without adding new customers. 

Tracking NRR accurately requires your accounting system to distinguish between different types of revenue changes and attribute them to specific customer cohorts. This level of detail becomes increasingly important as you scale. 

5. Churn Rate 

Churn directly impacts your ability to grow. Investors want to see both logo churn (the percentage of customers who cancel) and revenue churn (the percentage of revenue lost from cancellations). 

Monthly churn rates above 2-3% raise red flags for most investors. If you’re losing customers or revenue faster than you can replace them, your growth trajectory becomes unsustainable. 

Your accounting system should automatically calculate both types of churn and allow you to analyze trends over time. You need visibility into which customer segments churn most frequently and what impact that has on your financial projections. 

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The Infrastructure Required for Accurate Metric Tracking 

Tracking these metrics manually becomes impossible as you scale. You need accounting software built for subscription businesses that can automate calculations, maintain data integrity, and produce investor-ready reports. 

Both NetSuite and Sage Intacct offer robust capabilities for SaaS companies. These platforms automate revenue recognition, track subscription metrics, and integrate with your other business systems to provide a single source of truth for your financial data. 

The right infrastructure eliminates spreadsheet errors, reduces month-end close time, and gives you real-time visibility into your metrics. This allows you to make faster decisions and respond to investor questions with confidence. 

Building Your Financial Foundation for Growth 

Accurate metric tracking isn’t just about satisfying investor requirements, it’s about running your business effectively. When you have reliable data on your unit economics, you can make smarter decisions about pricing, sales strategy, and resource allocation. 

As you move through different growth stages, investors will expect increasingly sophisticated reporting. Building the right accounting infrastructure now positions you for success as you scale. Don’t wait until your next fundraise to get your metrics in order. 

Work with a Firm that Understand SaaS  

At BPM, we work with growth-stage SaaS companies to build the financial infrastructure they need to scale. We understand the metrics investors care about because we help our clients prepare for funding rounds, acquisitions, and IPOs. Our team can help you implement the right accounting systems, establish proper controls, and create investor-ready financial reports.  

Whether you’re tracking these metrics for the first time or preparing for your Series B, we can help you build confidence in your numbers. To discuss how we can support your growth journey and ensure your financial reporting meets investor expectations, contact us.