Monthly Recurring Revenue (MRR) is the most important topic for Managed Service Providers (MSPs). MRR is the lifeblood of MSPs and services they can bring into their portfolio of service offerings that generate MRR as well as client value are in high demand. Monthly Recurring Revenue is the amount of income your business generates automatically through your contract agreements with your clients on a monthly basis. Subscription services use this metric because they often receive payment on a monthly basis, making their monthly revenue numbers very important. Monthly invoices for services are typically booked as Operational Expenditures for Small and Medium businesses. In contrast large capital expenses would be represented by hardware purchases or perhaps a company vehicle or building.
Source: SaaS Metrics
Additional Reading: 8 SaaS Metrics and KPIs Every Company Should Track
Differences between Capital Expenditures and Operating Expenses
Related Terms: Capital Expenditures, Operating Expenses