Sales OS · Reporting
This SOP defines how Annual Recurring Revenue (ARR) is measured, validated, and reported consistently across Sales, Finance, Marketing, and Leadership, aligned with pipeline, bookings, and revenue forecasting.
ARR is the projected annualized value of recurring revenue from subscription-based or usage-based deals. It includes subscription revenue, usage-based recurring revenue, and upsells and expansions to existing customers. It excludes one-time revenue and setup fees, and (by default) renewals unless you choose to track them. ARR is discount-adjusted and reflects true expected revenue.
Report ARR two ways. Pipeline ARR is recognized for forecasting once an Opportunity reaches your first active stage. Booked ARR is recognized as committed revenue only once an Opportunity is Closed Won. Very early (pre-pipeline) opportunities are excluded from ARR reporting but may be referenced for visibility.
Store ARR on the Opportunity record in the CRM in a dedicated ARR field. For multi-currency operations, report from a currency-normalized field (for example ARR converted to a single reporting currency).
Report ARR monthly as part of the bookings report, following the same workflow defined in the bookings SOP. No standalone ARR report is required when all ARR values are sourced from the archived monthly bookings file.
Through the active selling stages, Sales owns entering and maintaining an accurate ARR value. At the order-review stage, the deal desk validates ARR as part of the review. Field behavior by stage should follow your opportunity-management SOP.
Errors discovered after a monthly report is submitted are corrected in the following month's bookings by logging an offsetting Opportunity (for example a negative-ARR entry), handled by RevOps and flagged as early as possible. Vet ARR values before close: at each stage transition, at quote generation, and during order review.
ARR feeds executive reporting, performance tracking, and investor reporting; aligns go-to-market teams on a consistent, real-time revenue expectation; and prevents currency or pipeline edits from misrepresenting prior ARR totals.