In episode #331, Ben breaks down the true financial and economic differences between a SaaS company and an AI company. Inspired by a tweet claiming that “SaaS metrics are broken” and that AI companies generate more absolute profit per customer, Ben puts the theory to the test using real financial modeling.

This episode walks through detailed revenue, gross margin, EBITDA, pricing power, TAM dynamics, and unit economics scenarios to determine whether AI companies actually outperform SaaS businesses.

What This Episode Covers

• Why investors are questioning traditional SaaS metrics when evaluating AI companies
• The importance of recurring revenue fundamentals, whether the company is SaaS or AI
• A side-by-side comparison of a $1M SaaS company versus a $1M AI company
• Gross margin profiles: 80 percent SaaS vs. 55 percent AI
• How EBITDA changes when OpEx is held constant
• The revenue scale required for an AI company to match SaaS gross profit
• The revenue scale required for an AI company to match SaaS EBITDA
• Why AI companies need a TAM that is 6x larger
• How pricing power tied to labor displacement can shift AI unit economics
• Modeling ARPA increases to see when AI gross profit matches SaaS
• Why the underlying P&L structure does not change, but the inputs do
• How founders should think about forecasting and financial strategy when building AI-native products

Why This Matters

• Founders embedding AI into SaaS products
• AI-native startups modeling their financial future
• CFOs and FP&A leaders forecasting revenue, cash, and margins
• Investors evaluating early-stage AI companies
• Operators building long-term company valuation strategies

Ben emphasizes that the P&L, revenue streams, cost structure, and core KPI’s still apply. What changes are the inputs—gross margin profile, pricing power, TAM, ACV, and scalability assumptions.

Resources Mentioned

• Full blog post with financial modeling examples: https://www.thesaascfo.com/the-real-economics-of-saas-versus-ai-companies
• SaaS metrics course: https://www.thesaasacademy.com/the-saas-metrics-foundation

In episode #330, Ben explains one of the most common and costly SaaS finance mistakes: failing to allocate CAC between new and existing customers. This oversight leads to misleading KPI’s, inaccurate CAC payback, flawed LTV to CAC ratios, and unreliable unit economics. Ben walks through exactly how to allocate CAC the right way, how to segment sales and marketing expenses, and why this matters for accurate revenue efficiency metrics and due diligence.

• Why fully burdened sales and marketing expenses are required for accurate CAC

• The danger of pushing all sales and marketing expenses into CAC without allocation

• How to allocate CAC between new customer acquisition and expansion

• How to segment sales teams (hunters vs. farmers) and avoid co-mingled headcount

• Allocating marketing spend based on acquisition channels

• Typical allocation benchmarks for sales (60-80% to new) and marketing (80-90% to new)

• Why accurate CAC is essential for CAC payback, LTV to CAC, and cost of ARR

• How the Cost of ARR provides a blended benchmark without requiring allocation

• Using allocation methods for businesses with multiple product lines or motions

• How to correctly calculate CAC using fully burdened sales and marketing expenses

• How to evaluate marketing economics and sales efficiency with proper allocation

• Why unallocated CAC leads to distorted financial strategy and misleading KPI’s

• How CAC allocation flows into CAC payback period, LTV to CAC, and ARR efficiency

• How to build a repeatable, defensible go-to-market metrics framework that withstands due diligence

• SaaS founders scaling beyond early customer acquisition

• CFOs, FP&A leaders, and finance teams who own KPI modeling

• Operators who need accurate CAC, CAC payback, and LTV calculations

• Investors or advisors assessing revenue efficiency and go-to-market economics

• SaaS Metrics Foundation course covering CAC, LTV, ARR, and unit economics: https://www.thesaasacademy.com/the-saas-metrics-foundation

• Coaching resources on building an accurate, SaaS-specific chart of accounts: https://www.thesaasacademy.com/saas-cfo-coaching

In episode #329, Ben Murray, The SaaS CFO, breaks down the growing debate around SaaS economics versus AI economics. A recent post claimed that “SaaS metrics are broken” and that traditional KPIs no longer apply to AI companies.

Ben challenges this idea and walks through why recurring revenue metrics still matter, how revenue models differ across SaaS and AI, and what CFOs need to understand about gross margin, unit economics, and total addressable market.

• Why claims that SaaS metrics are “broken” are inaccurate

• The difference between SaaS economics and AI economics

• Why recurring revenue metrics still apply to AI companies

• How subscription versus usage revenue impacts KPI calculation

• Gross margin expectations for SaaS vs. AI companies

• Whether AI companies truly generate more profit per customer

• The role of absolute profit versus per-customer economics

• How AI may expand TAM by targeting labor budgets, not just software budgets

• How Agentic AI affects financial modeling and cost structures

• Using ROSE (Return on Software Employees) to evaluate AI-driven ROI

• Why SaaS metrics still matter for both SaaS and AI companies

• How CFOs should evaluate margins, ARR, and revenue quality in AI models

• The difference between rate-based economics (ARPA, ACV) and volume-based economics (absolute profit)

• How to think about financial strategy when transitioning from a pure SaaS model to an AI-embedded product model

• How to assess realistic AI unit economics instead of relying on hype

• SaaS CFOs and finance leaders evaluating AI investments

• Founders embedding AI into their product and adjusting their financial models

• Operators who want a grounded understanding of real AI economics

• Investors assessing how AI shifts revenue models and margins

• Ben’s upcoming deep-dive blog post on SaaS vs. AI economics: TheSaaSCFO.com

• SaaS Metrics Foundation course for mastering KPI’s, ARR, MRR, and unit economics: https://www.thesaasacademy.com/the-saas-metrics-foundation

• ROSE metric framework for analyzing AI-driven productivity and financial systems: https://www.thesaascfo.com/saas-rose-metric/

At what point should a founder stop running finance and accounting and hand the numbers to an expert?

In episode #328, Ben Murray walks through the inflection points when SaaS founders should consider hiring a bookkeeper and/or fractional CFO to protect data accuracy, improve forecasting, and strengthen company valuation. You’ll learn the warning signs that your financial systems and reporting are holding back growth—and how to build a finance function that scales with your business.

What You’ll Learn

• When to hire help by ARR stage
• Monthly close discipline: Why closing your books every month—accurately—is critical for investor trust.
• Accrual vs. cash accounting: How switching methods reveals true business performance.
• COGS clarity: Setting up a SaaS P&L that separates revenue streams, COGS, and OPEX for real gross-margin insight.
• Retention readiness: Why your MRR schedule (revenue by customer by month) is worth its weight in gold.
• Cash-flow forecasting: How to move beyond the bank-balance mentality to proactive cash planning.
• Investor presentation: Ensuring your metrics, slide deck, and financial statements tie together cleanly.

Why It Matters

• For Founders: Delegating finance isn’t failure—it’s a strategic step toward sustainable scaling and higher valuation.
• For CFOs and Advisors: Knowing these trigger points helps you coach founders on financial readiness.
• For Investors: A disciplined monthly close and clean P&L build confidence in revenue quality and forecasting accuracy.

Key Takeaways

• Growth dictates urgency: the faster you scale, the earlier you need finance expertise.
• A bookkeeper should close the books by mid-month to avoid costly cleanup later.
• Move to accrual accounting to show economic performance and support fundraising.
• Create an accurate MRR schedule to prove retention and ARR health to investors.
• Build a basic forecast to manage cash runway and hiring decisions with confidence.

Resources Mentioned

SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation

Finance 101 for Founders: https://www.thesaasacademy.com/finance-101-for-saas-founders

Quote from Ben

“Just like I couldn’t go in and code your product, most founders can’t scale as CFO. At some point, finance needs a specialist so the business can keep growing on solid data.”

Your gross margin might not be telling the truth.

In episode #327, Ben Murray exposes the seven “dirty secrets” that distort SaaS gross margins — from incorrect COGS coding to missing allocations for shared resources and misclassified expenses. Whether you’re a CFO, finance lead, or operator, you’ll learn how to clean up your P&L and get accurate unit economics that reflect your true performance and valuation.

What You’ll Learn

• The 7 big offenders that make SaaS gross margins misleading.
• How to correctly code payment processing fees (Stripe, ACH, wire) under DevOps in COGS.
• The difference between internal-use software and third-party apps embedded in your product.
• How to classify customer success — adoption-focused vs. account management.
• Why demo and test environments must be allocated properly between departments.
• How to ensure fully burdened expenses (wages, taxes, benefits, bonuses) are coded correctly.
• The impact of co-mingled headcount on margins by revenue stream.
• Why department leaders belong in the departments they manage.

Why It Matters

• For Founders: Clean accounting drives higher (or preserved) company valuation and investor confidence.
• For Finance Teams: Accurate COGS and gross profit ensure your SaaS metrics are reliable.
• For Operators: Clear expense allocation helps identify efficiency opportunities in support, services, and DevOps.
• For Investors: Properly structured financial systems and accounting practices make due diligence faster and cleaner.

Key Takeaways

• Misclassified expenses can make your gross margin appear stronger or weaker than it really is.
• Always differentiate between OpEx and COGS — the foundation of credible financial modeling.
• Track margins by revenue stream (subscription, usage, services) for true business insight.
• Ensure your P&L reflects fully burdened costs per department — including contractors.
• Clean financial data = higher trust from investors and buyers.

Resources Mentioned

SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation

Quote from Ben

“Your P&L doesn’t lie — but bad coding does. If your COGS and OpEx aren’t clean, your gross margin isn’t either.”

Thinking about raising capital or selling your SaaS company? Your legal readiness can make or break the deal.

In episode #326, Ben Murray breaks down what investors and acquirers look for during due diligence — and why preparing your cap table, contracts, IP, and financial systems at least six months in advance is essential to protect your company's valuation and ensure a smooth process.

What You’ll Learn

Cap Table Management: Why tracking every issued share, option, and agreement matters — and how to avoid “email equity surprises.”

IP Protection: The critical role of signed IP assignment agreements for employees, contractors, and vendors.

Customer & Vendor Contracts: Why detailed MSAs, renewal clauses, and change-of-control provisions are required for investor confidence.

Accounting Readiness: How clean, timely accounting — especially a complete MRR schedule (revenue by customer by month) — helps prove the health of your recurring revenue and ARR growth.

Sales Tax Compliance: Why sales tax exposure can derail your exit process.

Due Diligence Prep: How to build your data room, organize key documents, and present your SaaS business model with clarity.

Why It Matters

For Founders: Legal gaps can reduce your valuation multiple and slow down the exit timeline.

For CFOs: Solid financial systems and clean documentation protect your cash flow and reputation with investors.

For Investors: A well-prepared company signals operational maturity and reduces transaction risk.

For Operators: Legal readiness supports strategic growth and prevents “deal fatigue” during M&A or fundraising.

Resources Mentioned

Ben’s Blog Post: “SaaS Legal Readiness Checklist” : https://www.thesaascfo.com/why-legal-readiness-can-make-or-break-your-saas-exit/

SaaS Metrics Foundation Course – Learn how to align your financial reporting and recurring revenue metrics for due diligence success.

Upcoming Webinar: “Legal Readiness for SaaS Founders — How to Prepare for an Exit or Raise” (details via newsletter)

💬 Quote from Ben

“You can’t fix legal readiness in a week. Start six months early, or you’ll be scrambling during due diligence when investors start asking for data you don’t have.”

“SaaS metrics are dead.” You’ve probably seen that post on LinkedIn or X lately. In episode #325, Ben Murray cuts through the noise to explain why SaaS metrics aren’t broken — they’re just evolving to match modern recurring revenue business models.

Whether you’re running a SaaS, AI, software, or managed services company, the same financial principles apply. The key is understanding your revenue types — subscription, usage, consumption, or transaction — and applying the right metrics framework for each.

What You’ll Learn

• Why SaaS metrics still work — and why the confusion exists.
• The difference between SaaS as a delivery model and recurring revenue as a financial model.
• Why the most important question isn’t “Are you SaaS?” but “What are your revenue types?”
• How financial systems and P&L design should reflect these revenue categories for accurate unit economics and valuation.

Why It Matters

• For Operators: The framework for recurring revenue metrics applies whether you sell software, data, or AI services.
• For Finance Teams: You can’t manage what you don’t measure — ensure your financial modeling captures all recurring components.
• For Investors: Strong recurring revenue visibility (ARR, NRR, margins) still drives valuation multiples — regardless of your label.
• For Founders: Stop worrying about the buzz — focus on measuring what matters for your business model.

Key Takeaways

• SaaS metrics = recurring revenue metrics.
• Focus on revenue types, not just labels like “SaaS” or “AI.”
• A clear chart of accounts and a well-designed financial system enable accurate SaaS metrics.
• The fundamentals of finance, accounting, and valuation haven’t changed — only the packaging has.

Resources Mentioned

🧾 The SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation

Quote from Ben

“SaaS metrics aren’t broken — they’ve just outgrown the acronym. These are recurring revenue metrics that apply to most modern business models.”

Your implementation and professional services teams could be quietly eroding your gross profit margin — and most SaaS leaders don’t even realize it.

In episode #324, Ben Murray explains how unclear COGS structure, mispriced services, and untracked internal resources can distort your unit economics and lower your overall SaaS valuation.

If your service margins are negative or your gross profit doesn’t match expectations, this episode shows you exactly where to look — and how to fix it.

What You’ll Learn

• Why implementation teams often kill gross profit without you noticing.
• How to calculate services margins by setting up clean revenue streams and COGS cost centers.
• The right services gross margin target.
• Why doing “free” onboarding work can destroy your unit economics.
• How underpricing services or blending resources (support, CS, services) skews your financial reporting.
• The balance between protecting ARR and monetizing implementation revenue.
• How to fix your SaaS P&L for visibility into margins by revenue stream.

Why It Matters

• For CFOs & Founders: Misclassified or underpriced services directly lower gross profit, cash flow, and company valuation.
• For Finance Teams: Clean COGS and OPEX separation creates accurate financial modeling, ARR margins, and retention-linked profitability.
• For Investors: Understanding margins by revenue stream signals financial discipline and scalability.
• For Operators: Properly scoped and priced services keep customer onboarding efficient and profitable.

Key Takeaways

• Every SaaS company should know gross margin by revenue stream (subscription, usage, services).
• Services losing 20–30% gross margin dilute your financial performance and cash flow forecasting.
• Accurate classification drives better SaaS metrics, including CAC payback, Cost of ARR, and LTV:CAC.
• A well-structured financial system is your best defense against margin erosion.

Resources Mentioned

Episode 323: Should Professional Services Be COGS or OPEX?

SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation

Quote from Ben

“If you don’t know your margins by revenue stream, you can’t manage them — and services might be the silent killer of your gross profit.”