How to track recurring revenue and client retainers

Recurring revenue is the money clients pay you on a repeating schedule: retainers, subscriptions, maintenance plans, monthly support. It is the most predictable part of a small business's income, which makes it the part worth tracking most carefully.

Tracking it well comes down to three things. Know the monthly total (your MRR). Know when each payment is due, so you notice when one is late. And see it next to what you pay out every month, so you know what is actually left. This guide covers all three, with a worked example you can copy into a spreadsheet.

What counts as recurring revenue?

Income counts as recurring when it repeats on a schedule and you expect it to continue without winning it again each time. For freelancers, agencies and small SaaS businesses, that usually means:

• Client retainers, such as a $2,500 monthly design or marketing retainer.
• Subscriptions you sell, monthly or yearly, for software, templates, courses or memberships.
• Maintenance and hosting plans you bill clients for each month.
• Fixed monthly support or advisory fees.

It usually does not include one-off projects, setup or onboarding fees, hourly work that varies from month to month, or a contract that has ended and has not been renewed. Those are real income, and they belong in your cash forecast, but mixing them into your recurring number makes it look steadier than it is.

What is MRR, in plain words?

MRR, or monthly recurring revenue, is the answer to one question: if nothing changed, how much would clients pay you this month? You add up every recurring payment at its monthly value. Yearly plans are divided by 12. Payments in other currencies are converted to yours.

MRR is not the same as the money that landed in your account this month. A yearly plan arrives all at once, and a late retainer may land next month. MRR smooths that out so you can compare one month with the next.

How do I calculate MRR? A worked example

Here is a small studio with three retainers, one of them in pounds, and a small template subscription it sells on the side. It also finished a $6,000 one-off project this month.

The pound retainer is converted at an example rate of $1.30 to the pound; use the current rate when you do your own. The yearly customers are $290 × 5 ÷ 12. The project is left out because it will not repeat.

How does MRR change from month to month?

Every change falls into one of three buckets, and it helps to track them separately:

• New: a new client or customer. Three new template customers add $87.
• Expansion: an existing client pays more. Harbor & Co moves from $1,800 to $2,200, adding $400.
• Churn: a client or customer leaves or pays less. One template customer cancels, removing $29.

Next month's MRR is $7,140.83 + $87 + $400 − $29 = $7,598.83. If your MRR is flat, these buckets tell you whether that is because nothing happened or because new clients are quietly replacing the ones you lose.

How do I track client retainers and late payments?

A retainer tracker needs one row per client and a few columns:

• Client and the person to contact about invoices
• Amount and currency, exactly as billed
• Billing schedule (monthly, quarterly, yearly) and due day
• Last payment date and days late
• Contract end or renewal date

The column that matters most day to day is days late. A retainer that is three days late is a quick email. One that is three weeks late is a cash flow problem, especially if it is one of your largest clients.

For more on planning around slow payers, the practical guide to cash flow shows how a single late payment moves a 13-week forecast.

How much is left after my tools?

MRR on its own tells you what comes in. The more useful number for a small business is what is left after the money that goes out just as regularly: software, hosting, domains, insurance, contractors on a fixed fee.

Using the studio from the example, with recurring costs of about $1,320 a month:

That remaining number is what pays for people, taxes and growth. When it shrinks, it is usually for one of two reasons: a retainer ended, or recurring costs crept up through new seats and price rises. Seeing both sides together is how you notice which. If the cost side has grown without anyone deciding it should, a SaaS subscription audit is the quickest way to bring it back. And when you plan next year, these two monthly totals are the starting point of a 2027 budget.

How do I track revenue in more than one currency?

Keep each client in the currency you bill them in. If Coastline Bakery pays £1,200, record £1,200, not the dollar amount it happened to be worth the day you set it up. Convert only when you add things up, and use a current rate.

Two practical points:

• Your total will move even when nothing else does. If the pound weakens, your MRR in dollars drops a little, even though the client pays exactly the same. That is worth knowing, but it is not churn.
• What lands can differ from the conversion. Your bank or payment provider may use its own rate and charge a fee, so the amount that arrives can be a little lower. Your statements show what really landed.

For a quick check of what a payment is worth today, the currency converter does the arithmetic.

Spreadsheet or app?

A spreadsheet works well for a handful of retainers. Use the columns above, update the last payment date each week, and add a formula for days late.

It gets harder as the list grows, when clients pay in different currencies, or when you also want to watch the cost side. That is when an app that tracks both sides and tells you about late payments saves the weekly check. If you use Claude, Subly's connector lets you ask about money in and out in plain words; asking Claude about your business spending shows how. The page for founders and freelancers shows how Subly fits that kind of business, and pricing shows which plan includes Stripe import.