An ₹87 Cr annual recurring revenue (ARR) SaaS company signed ₹30 Cr of new ARR last year. Today ₹24 Cr of it is live and billing. Not one deal was reported lost, and there is still a ₹6 Cr gap.
signed last year
live and billing today
Not one deal reported lost. Still a ₹6 Cr gap.
The gap sits between two numbers that most SaaS companies treat as one. Contracted ARR is the annualised value recorded when the order is signed. Live ARR is the annualised value of what is live and billing today. Sales celebrated the first. Finance was looking at the second.
Sales and Finance were looking at different numbers
Signing day looks the same in every SaaS company. The purchase order (PO) is posted in the leadership WhatsApp group, congratulations arrive within the hour, and the number goes on the dashboard.
Three months later, at the board meeting, the Sales Head says ₹30 Cr of new ARR. The CFO asks, "Which ₹30 Cr?" Two slides, two numbers, one uncomfortable silence.
The ₹6 Cr had not disappeared in one place. It had disappeared across five
Where the ₹6 Cr went
Year-three price increases were counted in the original booking value
Future uplifts, due only in year three, were recorded as part of the day-one number.
500 user licences became 300 during user acceptance testing (UAT)
The contract started at 500 licences and went live at 300.
40 branches were booked, but billing starts only as each branch goes live
The booking counted all 40 on signing day. Billing follows the rollout.
One customer cancelled before go-live and was still sitting in closed-won
Nothing had been billed, and nothing was reported lost.
A discount conceded to close the PO was never updated in the CRM
The booked value stayed higher than the price actually agreed.
Why nobody caught it
Three functions each own a different moment in the life of an order, and nobody owns the distance between them.
Sales is paid on the PO
So the booking is celebrated and closed.
Implementation owns go-live
So changes in licences or rollout are handled as delivery issues.
Finance invoices when billing starts
So Finance sees only what is live.
Nobody owns the gap between signed and billing. And the board deck still carries the original number.
The four-column check on last year's closed-won deals
You can measure your own gap by adding four columns to last year's closed-won deals.
Signed vs Live Reconciliation
Annualised value recorded at signing
The number in the CRM and the board deck.
Annualised value live and billing today
What Finance is actually invoicing.
The difference
Per deal, in rupees.
The reason
Rollout, licences, escalation, discount or cancelled.
Sort by the difference and start with the five largest. In that company, five orders held ₹3.5 Cr of the ₹6 Cr, and the same reasons kept appearing.
Three changes that keep the gap visible
Show two numbers in every management review
Contracted, and live and billing.
Update the CRM the week things change
When licences, commercials or go-live dates change, the account owner updates it that week, not at renewal.
Give one person the reconciliation
One person reconciles signed business with live billing and reviews every material difference until it is explained.
The difference decides your hiring, your working capital and your growth plan. A signed PO is not live billing
Related: 112% of target. No cash to pay salaries — the same gap one step later, between booked and collected.
Related: Your Sales Head says ₹4.2 Cr. Your CFO says ₹2.1 Cr — what two forecasts for one quarter usually mean.