You Should Be Collecting At Least 100% Of Your MRR Each Month in Cash. Ideally, 110%+. | Saa Str AI

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You Should Be Collecting At Least 100% Of Your MRR Each Month in Cash. Ideally, 110%+.

"Make sure every month you collect at least 100% of your MRR. Ideally, 110%. If it falls below 100%, you have a process failure in finance. And your runway may be far shorter than you expect." pic.twitter.com/6 Tl Ja Md Xdk — Jason ✨👾Saa Str. Ai✨ Lemkin (@jasonlk) July 24, 2026

"Make sure every month you collect at least 100% of your MRR. Ideally, 110%.

If it falls below 100%, you have a process failure in finance.

And your runway may be far shorter than you expect." pic.twitter.com/6 Tl Ja Md Xdk

— Jason ✨👾Saa Str. Ai✨ Lemkin (@jasonlk) July 24, 2026

Cash collections is a topic we haven’t discussed much on Saa Str, but boy, it can be important all the way until you have a strong VP Finance / CFO.  And often after.

What’s the issue?  The issue is that most B2B start-ups are terrible at collecting cash that doesn’t come from a payment gateway.  Just terrible.

And they often get worse as they go upmarket.  They hook up a payment system when they start as self-service, and the cash magically flows into the bank account.  But then they close some bigger customers.  And add some services.  Both of which require … invoicing.  Which are often are paid “Net 30” or “Net 60” or “Net Infinity”.  And no one follows up, because there is no finance team to follow up.  The invoice is sent out, and … the start-ups just … wait.  And let me tell you, 50%+ of the time, those invoices don’t just pay themselves.  You have to follow up.  And those great annual deals?  The cash that sounded so great from an annual deal just never comes.   At least, not enough of it.

Let me suggest a basic KPI and goal — and a warning sign:  You need to be collecting at least 100% of your MRR in cash each month.  Ideally, 110%+.

How can you collect more than 100% of your MRR each month?  It’s pretty easy in most cases.  First, annual deals that pre-pay up front should generate right there more than your MRR each month.  Second, pre-paid upsells, and conversion from monthly to annual deals will help too.  And finally, once renewals come, they will help a lot if they are annual.  They will rain cash.  So at least collect 100% of your MRR each month. (I set a goal of 110%, and we always hit it.  And we got cash-flow positive at $5m ARR, in large part because of measuring it and hitting it.)

What I see these days more and more is start-ups not paying attention to accounts receivable, invoicing, etc., and collecting 60%-70% of their MRR.  Oftentimes, without even knowing it, because they aren’t tracking the ratio.  Even worse, they pay the entire annual sales commission on these deals, without getting the cash.  Pay out a lot of 15%-20% commissions on deals where the cash never comes in, and watch your bank account shrink in real-time.  Combined together, that’s like effectively only receiving 50% of your MRR in cash each month after paid commissions on unpaid deals.

That’s terrible when cash matters.  Just terrible.  And it gets worse.  As those receivables age, they get harder to collect.  You have to write some of them off.  Ouch.

Imagine your start-up is doing

Now if you collect 110% of your MRR in this scenario, and don’t increase your burn much, and pay your sales reps upon cash receipt, are growing say 8% a month … your cash might last 18 months!  Your burn here might be about $90k on a net basis (after cash), and likely would go down at that growth rate if you are careful about hiring.

But if you only collect 60% of your MRR and pay the reps up front, your burn rate here might be $140k a month net (!).  All of a sudden, you are down to 6-7 months of runway for your cash.

That’s going from Scary (at 60% collections), Running Out of Money to Don’t Need to Worry (110%) on your cash runway.  With the exact same revenue, growth, team, company, and expenses!

At least, hire someone 4-8 hours a week to do collections.  Just A/R.  Their only job is to collect 100% of your MRR in cash per month. Too many folks hire someone to “do the books” but not an agency, contractor, service that really focuses on collections.

If cash is an issue, pay reps on cash receipt. But not for too long.  They won’t like it.  But it aligns interest.  Later, once cash doesn’t really matter, pay when the deal is Adobe Signed.

Set a clear, key collections goal of 100%+ of MRR.  Make it a Top, Weekly goal for the whole team.  Watch it go up once you do.

AI agents can help.  They aren’t a total answer, but they really can track all this for you and help chase collections.  We built one ourselves,

And watch your runway … run a lot, lot, lot … longer.

And btw can an AI Agent help?  Yes.  We built one to automate collections on top of Bill.com + Quickbooks + Brex.  It does 90% of the human work and it’s awesome, as is pushes out the invoice the minute a deal is signed, sends out reminders, tracks deals that are behind, and let’s us now the minute cash comes in the door.

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What's the best way to calculate LTV for a Saa S business with negative MRR churn (MRR retention greater than 100%)?

Cash Cash Plays the Big Party Outdoors at Saa Str Annual!!

In Saa S products, we often tend to push customers to pay yearly, bi-annually, or quarterly instead of monthly by giving a 2-month, 1-month, and half a month discount. How do we calculate the MRR in this case?

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Key Takeaways

• AI VC AI Mentor: Digital Jason + Amelia AI Startup Benchmarking

• AI Agent Playbook Free e Books

    e Book: Hiring a Great VP of Sales
    e Book: Raising Capital
    e Book:  The First $1m ARR
  

• University All Posts Podcasts The Top CROs VC Fundraising Top Videos Q&A Best of Saa Str #1 Bestselling Book Search Everything Join the Community

• Free e Books

    e Book: Hiring a Great VP of Sales
    e Book: Raising Capital
    e Book:  The First $1m ARR
  

• AI Annual 2026 Events Overview Sponsors

    Event Sponsorship
    Media Sponsorship