🎙️ Hey there, SaaSpreneurs!🎙️

It's Ben Murray here, and I'm thrilled to share our latest episode of SaaS Metrics School with you. Ever found yourself confused about coding consultants versus contractors on your SaaS P&L?

Trust me, it's more critical than you might think! I'll walk you through the nuances, share best practices, and introduce my special ROSE metric to help you assess your revenue generation more effectively.

The clock is winding down to save $500 on my SaaS metrics training program and community. Learn more here!

And I’m holding a SaaS Metrics AMA in my community next Wednesday. Join the community here and then RSVP in the Meetups section.

You can also listen to this episode here.

📓Key Concepts to Learn💡

1. Defining Consultants vs Contractors:

   • Consultants:

     These professionals are brought in for one-time projects to provide specific expertise, like reviewing your pricing strategy or SaaS architecture. They typically engage for a short period of time and do not integrate as part of your regular staff.

   • Contractors:

     These are long-term collaborators who supplement your existing workforce. Often seen in early-stage SaaS companies, contractors can work part-time or full-time, especially in R&D and Sales roles. They are more integrated and regularly involved with your team than consultants.

2. Importance of Expense Coding:

   • Accurate categorization of consultants and contractors on the SaaS P&L is crucial. Misclassification can cloud financial insights and affect metrics that drive business decisions. Keeping wages, consulting expenses, and contractor expenses in separate general ledger accounts is fundamental for precise financial analysis.

3. The ROSE Metric:

   • I created the ROSE Metric years ago. The ROSE (Return on SaaS Employee) metric evaluates dollars spent on wages, taxes, benefits, bonuses, commissions, and contractor expenses. This holistic view helps understand organizational efficiency and measures how effectively your company converts people investment into recurring revenue.

4. Department Coding:

   • Just as with your full-time employees, it's essential to code consultant and contractor expenses by department. This granularity ensures better tracking and understanding of how different areas of your business leverage outsourced expertise, which can be crucial for targeted financial strategizing.

Ready to supercharge your SaaS business? Join Ben’s SaaS community with over 7,000 members for exclusive content. Don't miss out — maximize your SaaS knowledge today!

If you found this episode helpful, make sure to tune in to future episodes of SaaS Metric School to broaden your knowledge of essential SaaS metrics and finance topics.

Got any burning questions or specific metrics you'd like us to cover?

Drop us a line, and we'll do our best to address them in upcoming episodes.

Until next time, keep hustling and measuring those metrics!

Best regards,

Ben Murray
Host of SaaS Metric School

P.S. Don't forget to subscribe to our podcast and share it with your SaaS business buddies. Together, let's conquer the world of SaaS metrics!

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