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Reporting

ARR Report

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Tabs calculates annualized recurring revenue (ARR) based on contractual obligations, not recognized revenue (ARR ≠ Monthly Recognized Revenue × 12).

Because ARR is a non-GAAP, forward-looking metric that is separate from GAAP revenue, it is not skewed by revenue adjustments (e.g., credit memos) or recognition patterns.

This separation lets you compare annualized GAAP revenue against ARR to surface:

  • Lagging events caused by implementation inefficiency, billing errors, adjustments, abuse, or fraud
  • Leading events driven by overage that indicate upgrade opportunities

The ARR report can be found in the App and via API.

ARR calculation

Tabs first converts non-monthly contract terms into a monthly run rate, then annualizes it. For example, 12,000quarterly=12,000 quarterly = 4,000 monthly → 4,000/monthx12months=4,000/month x 12 months = 48,000 ARR.

Because Tabs ARR is based on contractual obligations, ramped contracts reflect the run rate for each stage.

ProductPriceFrequencyPeriodsARR Configuration
Platform FeeIncluded
• Trial (M1-M3)$0Monthly3
• Pilot (M4-M6)$500Monthly3
• Scale (M7-M12)$1,000Monthly6
M1M2M3M4M5M6M7M8M9M10M11M12
ARR$0$0$0$6,000$6,000$6,000$12,000$12,000$12,000$12,000$12,000$12,000

Configurable ARR

Unlike Recognized Revenue, ARR is a non-GAAP metric for financial planning & analysis. Each company tailors its definition to fit its business model and reporting needs. To support both rigor and flexibility, Tabs introduces Configurable ARR for you to further define what contributes towards ARR without compromising industry best practices for defensible and transparent ARR reporting.

Set an ARR default on a product

You can set an ARR default on a product to be applied automatically to the billing terms created from that product. Set it in either place:

  • Products → Create product or Edit product. The field is ARR default.
  • While creating or editing a billing term, select from the product dropdown. The default is applied when you assign the product to a billing term.
  • Save the billing term.
  • Changing a product’s ARR default later applies only going forward; existing billing terms remain unchanged.
ARR defaultWhat a new billing term starts as
UnspecifiedNew products start as Unspecified. Tabs will follow the billing term ARR settings.
IncludeIncluded in ARR
ExcludeExcluded from ARR

Set an ARR default via bulk product catalog upload

You can also set the same field in a product catalog upload. The column is arr_default. Accepted values are Include, Exclude, or blank.

  • A blank cell on a new product saves Unspecified.
  • A blank cell on an existing product leaves that product’s current ARR default unchanged.
  • The upload changes the product only. It does not rewrite billing terms already on that product.

Set usage ARR at the merchant level

When a product has a usage-based billing term, ARR follows the merchant-level usage ARR configuration to account for the complexity of committed vs. non-committed usage and overage.

You can configure usage products at the merchant level from Configure → Usage ARR Config on the ARR Waterfall report page.

Committed Usage

  • Committed minimum: Included
  • Overage: Excluded

Non-committed Usage Configuration

  • Exclude (Default): Variable usage without committed minimums (e.g., Pay-As-You-Go) contributes $0 to ARR regardless of actual usage revenue. Most conservative approach.
  • 3-month average: ARR = trailing 3-month average of actual usage revenue x 12. Responsive to recent trends (captures changes within one quarter) but can be volatile for customers with spiky usage. (ie, M1 = M1 x 12, M2 = Avg(M1+M2) x 12, M3 = Avg(M1+M2+M3) x 12 and so on.)
  • 6-month average: ARR = trailing 6-month average of actual usage revenue x 12. Smoothest view — absorbs quarterly spikes and dips. But lags behind rapid trend changes by up to two quarters. Best for mature, stable usage patterns. (ie, M1 = M1 x 12, M2 = Avg(M1+M2) x 12… M6 = Avg(M1+M2…+M6) x 12 and so on.)
ProductPriceFrequencyPeriodsARR Configuration
API Calls$1/unitMonthly12Exclude/3-mth Ave/6-mth Avg
PeriodsM1M2M3M4M5M6M7M8M9M10M11M12
Actual Usage$50$1,000$200$50$250$1,750$0$0$0$0$0$0
ARR: Exclude$0$0$0$0$0$0$0$0$0$0$0$0
ARR: 3-mth Avg$600*$6,300*$5,000$5,000$2,000$8,200$8,200$8,200$8,200$8,200$8,200$8,200
ARR: 6-mth Avg$600*$6,300*$5,000*$3,900*$3,720*$6,600$6,600$6,600$6,600$6,600$6,600$6,600

* partial window — not enough history available

Automatic ARR audit

Tabs continuously audits your ARR settings using these rules and surfaces exceptions for you to review.

For non-usage billing terms:

  • One-time billing terms are excluded.
  • If a product default exists, Tabs compares the billing term’s ARR setting against the product settings for consistency. Any deviation is flagged as an exception.
  • Otherwise, Tabs evaluates the billing term’s ARR setting based on type (flat vs. usage) and cadence (one-time vs. recurring). Any unreasonable setting (e.g., included in ARR with a one-time cadence) is flagged as an exception.

Although you can override the ARR setting, Tabs enforces a fixed rule set to ensure the calculation remains accurate.

  • Committed usage: the committed amount (base + true-up) is included. Overages are excluded.
  • Non-committed usage follows the merchant usage setting: Exclude (Default), 3-Month Avg, or 6-Month Avg.

Review ARR audit exceptions

A banner at the top of the ARR Waterfall report checks billing terms against the rules:

StatusMeaning
Checking your ARR configurationAudit is in progress.
No ARR exceptionsEvery billing term matches expected ARR behavior.
ARR exceptions need reviewAt least one billing term violates expected ARR behavior.
Check againRe-run the audit.

Open Revenue → ARR waterfall → Configure to open three tabs:

TabWhat it lists
ExceptionsBilling terms whose current setting differs from the expected ARR setting, and that difference has not been accepted.
OverridesBilling terms you chose to keep different from the expected setting.
Usage ARR configView or adjust how usage billing terms contribute to ARR.

Exceptions

Each exceptions and overrides row shows the context about the customer, contract, product and its ARR default, billing term (type and cadence), and the ARR setting as Current vs Expected. You can review and take action using the action icons on each row, or select multiple items for bulk edit:

  • Apply expected sets the billing term to the expected Included or Excluded value and removes any override on that term.
  • Keep current leaves the billing term’s setting unchanged and records it as an override. The term moves from Exceptions to Overrides.

Customer and billing term names link to those records. Click the Columns icon to show or hide additional fields (Contract ID and Product ID). You can also export the list to CSV.

Overrides

The Overrides tab also shows who recorded the override and when, with an action to apply the expected setting. This aligns the billing term with the rule and removes the override.

If you later change the product’s ARR default, or you change that billing term’s ARR setting, the billing term returns to Exceptions for another review.