SaaS due diligence checklist: the revenue and customer section

Most SaaS due diligence checklists try to cover everything: legal, HR, technology, security, tax and finance, a line or two each. This one covers one section in depth: revenue and customers. For a subscription business, this is the section a buyer’s analyst rebuilds from your billing data, and where most follow-up questions come from.

Each item below says what the buyer asks for, what to prepare, and where to read more. For the other sections, use a full checklist such as Software Equity Group’s SaaS M&A due diligence checklist alongside this one.

Where revenue diligence fits

A sale usually moves from a first look at headline numbers, to a letter of intent, to confirmatory diligence, where the buyer checks those numbers in detail. Revenue diligence starts early: the headline numbers you share first get rebuilt later. Anything you can’t reproduce in confirmatory diligence turns into a question, a delay or a renegotiation point. So the best time to check your revenue numbers is before the first conversation, not during it.

The checklist

1. MRR and ARR history, normalized

• Buyer asks: monthly MRR for at least the last 24 months, and ARR at each year end.
• Prepare: annual and quarterly plans normalized to monthly amounts. Leave out one-time charges. Use one reporting timezone for month ends. Write down any months with unusual events, such as a price change or a billing migration.

2. ARR bridge

• Buyer asks: a walk from beginning to ending ARR by quarter and year: new, expansion, reactivation, contraction, churn and FX.
• Prepare: a bridge that ties to the MRR history, quarter by quarter.
• Read: What an ARR bridge shows a buyer.

3. Net and gross revenue retention

• Buyer asks: trailing-12 NRR and GRR, often quarterly for the last two years, and sometimes by plan or customer segment.
• Prepare: a stated calculation, covering who counts as the starting group, how reactivations are treated and how past-due subscriptions are handled, applied consistently.
• Read: Net revenue retention: how a buyer reads your NRR.

4. Cohorts

• Buyer asks: customer and revenue retention by signup cohort, monthly or quarterly.
• Prepare: cohorts built from first paid service period. Know which cohorts look unusual, and why.
• Read: SaaS cohort analysis: how a buyer reads your cohorts.

5. Customer concentration

• Buyer asks: top customer and top 10 share of MRR, customers above 10%, and how those have moved over the last 12 to 24 months.
• Prepare: contract terms, renewal dates and payment history for your largest customers. Group related accounts that belong to the same parent organization.
• Read: Customer concentration: how a buyer reads it.

6. Plan performance and pricing history

• Buyer asks: MRR, customers, ARPA and retention by plan, plus the history of price changes.
• Prepare: a plan list that maps old and new prices to the same product, the dates of each price change, and what happened to retention after each one.

7. Customer churn

• Buyer asks: monthly customer churn rate, and the reasons customers leave.
• Prepare: a churn rate with a stated definition, plus any cancellation reasons you collect. Expect large churned accounts to be asked about by name.

8. MRR, recognized revenue and cash

• Buyer asks: whether MRR ties to recognized revenue in your financial statements, and to cash collected.
• Prepare: a monthly reconciliation of the three. Explain the gaps: annual prepayments, failed payments, refunds, credit notes, discounts and usage charges.

9. Upcoming renewals

• Buyer asks: which annual contracts renew in the next 12 months, and for how much MRR.
• Prepare: a renewal calendar, especially for large customers.

10. Per-customer MRR schedule

• Buyer asks: one row per customer and one column per month, with MRR in each cell.
• Prepare: a schedule whose monthly totals equal your MRR history exactly. Analysts use it to check every other number on this list.

How the numbers should tie together

A buyer’s analyst tests consistency more than any single metric:

• The ARR bridge’s ending ARR each quarter should equal MRR × 12 for that month.
• The per-customer MRR schedule should add up to MRR for every month.
• NRR’s starting MRR should match MRR for the starting group in the schedule.
• MRR, revenue and cash should differ only for reasons you can explain.

Common breaks include annual invoices counted in the month they were billed, one-time charges counted as recurring, deleted or test customers left in, and different month-end cutoffs in different tables.

How Bright Vault covers this section

Bright Vault builds the numbers behind most of this list from your Stripe history. Contract terms, cancellation reasons and pricing decisions are still yours to document.

• Reports for MRR and ARR, movements, retention (including by plan), cohorts, concentration and plan performance
• CSV exports of the ARR bridge and the per-customer MRR schedule, which tie to the MRR table on screen

The metrics follow ChartMogul’s methodology, and every report can be filtered by plan.

Two limits: Stripe is the only billing source, and reports are private to your team. There are no buyer rooms or share links, so diligence material leaves as CSV. Bright Vault doesn’t replace an M&A advisor, a quality of earnings review or legal counsel.

For the timeline around this checklist, read how to prepare a SaaS business for sale a year out.

FAQ

What is the SaaS due diligence process?

It’s the buyer’s check of everything you’ve told them, after a letter of intent and before closing. For a SaaS business it usually covers financial, legal, technical, security and commercial areas. On the revenue side, the buyer rebuilds your MRR, retention, cohorts and concentration from billing data and compares them with what you shared earlier.

How do you prepare for SaaS due diligence?

Rebuild your own revenue numbers first, the way a buyer would: normalize MRR, produce an ARR bridge and a per-customer MRR schedule that tie to each other, write down how retention and churn are calculated, and explain any month or cohort that looks unusual. Then gather contracts and renewal dates for your largest customers. Starting months ahead also leaves time to fix what you find.

What’s on a SaaS due diligence checklist?

A full checklist covers corporate and legal documents, financial statements, tax, employees and contractors, technology and security, and customers and revenue. This page goes deep on the last of those. Use a full checklist for the rest.