ARPU report discrepancy

Modified on: Mon, 22 Jun, 2020 at 2:59 AM

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Why ARPU cannot be enabled when consolidated invoicing is enabled?


The Average Revenue Per Use or ARPU lets you forecast your revenue with the recurring monthly revenue that you receive from your customers (which includes upgrades, downgrades, and churn). 

You may have several customers who use multiple subscriptions and to ease their billing you could have set up the consolidated invoicing feature.

If you choose to enable consolidated invoicing in your site then the ARPU calculation may not work due to the following reasons,

    1. Subscription date/days

      When the user has consolidated invoicing enabled, it means they have one or more subscriptions that arrive at payment on the same renewal date. Since ARPU involves average revenue calculation of a user for a month the subscription period whether quarterly or annually or monthly should be known. This becomes impossible to calculate ARPU when you have subscriptions that have the same renewal date and different duration types. 
      For example, if a user has subscription “A” that renews every 3 months and subscription “B” that renews annually then the consolidated invoicing enabled makes ARPU calculation complex and sidelined.

    2. Invoice level attributes

      ARPU encloses invoice level reporting, therefore when multiple invoices are consolidated, it becomes difficult to process a refund or issue a credit note. 
      For example, when a customer has 3 subscriptions and is processed with a refund of $50, it becomes difficult to identify as to which invoice the refund is for and may affect the ARPU value that is to be calculated.

    3. Proration

      Chargebee involves day based reporting. I.e. If a customer signs up for a 3-month subscription then, he is charged on a daily basis depending on the days in a month. For Jan - 31 days, Feb - 28 days, etc. This is to ensure that the proration feature in Chargebee works effectively.

Related articles and Documentation

How can I see the retention rate of my subscriptions or LTV of customers?
What is Average Revenue Per User (ARPU)?

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