You call it recurring revenue. Your customer calls it a monthly decision.

Revenue that repeats and revenue that recurs look identical on the P&L, and behave completely differently the moment a customer starts economising.

By Steve 5 min read
Abstract bridge artwork for You call it recurring revenue. Your customer calls it a monthly decision.

Two businesses each report £1.2m of “recurring revenue” from a hundred customers paying £1,000 a month. One of them has revenue that arrives unless something stops it. The other has revenue that arrives because a hundred people decide, twelve times a year, to let it. The management accounts cannot tell them apart. A downturn can, and so can a buyer’s diligence process. The distinction worth drawing is between revenue that repeats and revenue that recurs. Repeating revenue is a series of purchases that happen to look alike. Recurring revenue is…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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