annual plans are 61% of revenue and my mrr chart is basically fiction

The trap with fourteen annuals is not the chart, it is the renewal calendar.

With monthly subscribers, churn arrives in a thin trickle you can react to. With annuals it arrives on specific days, often several at once, and it reflects how someone felt about the product months ago rather than now. Five renewals in one month means one bad month can take 12% of your revenue in a fortnight, and nothing you do that week changes it.

Put every renewal date in a calendar and treat the six weeks before each one as work: a check-in email, a note about what changed since they signed up, and an actual look at whether they have logged in. My annual renewal rate went up noticeably once I stopped finding out about them on the day.

You need two charts, and the mistake is trying to make one number do both jobs.

Chart one, normalised monthly revenue: annual divided by twelve, added to the monthly subscriptions, plotted on the month it relates to rather than the month it was paid. That answers is the business growing, and it is the only version where March and April look like what actually happened.

Chart two, cash collected per month. That answers can I pay for things, and it should look lumpy, because it is lumpy.

The thing that connects them is deferred revenue - money you have taken for service you have not delivered yet. On the day an annual customer pays 290 you have collected 290 and earned about 24. The rest is an obligation. Keeping a running total of that has stopped me spending money I had not earned twice now, and it is one extra column in the same spreadsheet.

Worth raising with whoever does your books before your year end rather than after. Cash you collected in one year for service running into the next can land in a different period for tax than the one where you actually do the work, and the answer depends on which basis you report on.

It matters practically: a big December of annual prepayments can create a tax bill in a year where the corresponding hosting costs and support hours all fall the following spring. Not a reason to avoid annual plans - they are the best cash flow tool a small product has - just do not discover it in April.

Honest opinion: at 41 customers, MRR is a borrowed metric and it is borrowed from companies that have investors to update.

What I track on a one person business is money in this month, money out this month, and how many months of costs are in the account. Then one revenue number on a rolling twelve month basis, which flattens the annual lumps without pretending you can spread cash you have not received.

MRR is a good comparison tool between plans and cohorts. It is a bad steering wheel for a business where one annual renewal is 2% of the year.

Built exactly this spreadsheet last year, one row per month, and the columns that ended up mattering: cash collected, refunds, normalised revenue, deferred balance at month end, active accounts, and new versus lost accounts as raw counts rather than percentages.

Raw counts were the surprise. Percentages at this size are theatre - losing two customers out of 41 is 5% churn and sounds alarming, but two is two, and I know both their names and why they left. The percentage told me to panic, the names told me one had gone out of business and the other never finished setup.

Normalised revenue for direction, cash for decisions, deferred revenue so you know what you owe. Three columns, one spreadsheet, ten minutes a month.