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  "documentTitle": "The Ultimate Guide To ARR",
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  "notes": "The slide uses a specific formula for ARR calculation as a framework for financial reporting.",
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      "kind": "framework",
      "text": "Price * Quantity / Duration (in months) * 12 = ARR",
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      "text": "Customer A is billed monthly, has five seats on their subscription, and is invoiced on April 1st for $100 ($20 per seat per month). On April 16th, they upgrade their subscription to include two more seats. Rather than waiting to invoice Customer A for seven seats on May 1st, you issue a $20 prorated invoice ($20 * 2 seats * 50% of the month) for the 15 days the two seats are active in April, which were not included in the April 1st invoice.",
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      "text": "There are two things we suggest doing when sending prorated invoices: 1. Adjust the end date of the original invoice up to the day before the prorated invoice (i.e., to April 15th in the example). 2. Gross up the invoice amount to what it would’ve been in a non-prorated environment. This will look something like the below:",
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      "kind": "paragraph",
      "text": "What to consider: How do you avoid double counting when a prorated invoice was issued to resolve a mistake in a prior invoice?",
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      "kind": "paragraph",
      "text": "What we recommend: You should send prorated invoices automatically to bridge the gap between the amendment and the next scheduled invoice. This is the most optimal solution for reporting and cash flow for your business.",
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      "kind": "paragraph",
      "text": "Now that we've covered all the factors to consider when defining ARR for your business, we can move on to the fun part—building it.",
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