What is Net Cash Flow?
Net Cash Flow is the actual money received from paid invoices, minus refunds and processing fees. It represents what landed in your bank account — not a normalized projection, but real cash movement.
MRR normalizes subscription revenue to a monthly figure. Net Cash Flow does not normalize — it records what Stripe actually settled. An annual plan paying $1,200 upfront shows $100/month in MRR but $1,200 in Net Cash Flow the month it’s collected. One-time charges and setup fees appear in Net Cash Flow but never in MRR. Metered usage appears in both: in full in Net Cash Flow the month it’s paid, and in MRR as the average of each usage customer’s last 3 metered invoices.
Cash flow growing in line with MRR is healthy. If the gap between MRR growth and cash flow growth is widening, fees or refunds are absorbing an increasing share of revenue.
The Net Cash Flow formula
Worked example
March 2026: Your Stripe account processes the following during the month:
| Component | Source | Amount |
|---|---|---|
| Subscription payments | Paid invoices | $48,200 |
| Annual prepayment (1 customer) | Paid invoices | $3,600 |
| One-time setup fee | Paid invoices | $500 |
| Total Cash Received | $52,300 |
| Deduction | Amount |
|---|---|
| Refunds (2 issued) | −$850 |
| Stripe processing fees | −$1,542 |
| Net Cash Flow | $49,908 |
Meanwhile, MRR for the same month might be $48,500 — reflecting normalized subscription revenue. The $1,408 gap comes from the annual prepayment inflating cash ($3,600 collected vs $300 MRR), the one-time fee ($500, excluded from MRR), and the deductions for refunds and fees ($2,392).
Why cash and MRR diverge
Annual prepayments are the largest driver. A single $12,000/year plan adds $1,000/month to MRR but $12,000 to Net Cash Flow in the collection month. In months with multiple annual renewals, Net Cash Flow can spike well above MRR. In months without them, it drops below. Refunds and fees create a steady downward drag that MRR never reflects.
How it’s computed
North Metric computes Net Cash Flow from three Stripe data sources, each pulled during the daily snapshot:
The three-source pipeline
Each source maps to a context variable in the computation engine. total_paid_invoices sums amount_paid from the paid invoices dataset. total_refunds sums amount from the refunds dataset. total_fees sums fee from balance transactions. All three divide by 100 to convert from Stripe’s cent-denominated amounts.
What’s included
Everything that produces a paid invoice in Stripe: subscription renewals, one-time charges, metered usage invoices, setup fees, and manual invoices. If Stripe marked it paid, it counts toward cash received. This is broader than MRR, which counts subscription amounts plus the average of each usage customer’s last 3 metered invoices, and leaves one-time charges out.
Fee handling
Stripe’s processing fee is typically 2.9% + $0.30 per successful charge, though it varies by card type, country, and plan. North Metric reads the actual fee from each balance transaction — not an estimated percentage — so the deduction reflects exactly what Stripe charged. Currency conversion fees and dispute fees are included when present.
Net Cash Flow vs MRR
Net Cash Flow and MRR both measure revenue, but they answer different questions and diverge in predictable ways.
| Net Cash Flow | MRR | |
|---|---|---|
| What it measures | Actual cash collected, net of deductions | Normalized recurring subscription revenue |
| Includes one-time charges | Yes — setup fees, one-time invoices | No — only subscription amounts and metered usage |
| Metered usage | In full, the month it’s paid | Average of each usage customer’s last 3 metered invoices |
| Includes fees & refunds | Yes — subtracted from the total | No — MRR is gross of fees and ignores refunds |
| Annual prepayments | Full amount in the collection month | Spread as monthly amount (÷ 12) |
| Best for | Cash planning, runway, fee monitoring | Growth tracking, retention analysis, investor reporting |
Common Net Cash Flow mistakes
- Treating Net Cash Flow as MRR. Net Cash Flow counts one-time charges and annual prepayments at full value, which MRR leaves out or spreads, and metered usage as invoiced rather than as MRR’s 3-invoice average. It also subtracts fees and refunds that MRR ignores. The two metrics will almost never match — and they shouldn’t.
- Ignoring fee trends. Processing fees typically run 2.5–3.5% of gross charges, but they compound as volume grows. A $100K/month business pays ~$3K in fees; at $500K/month that’s ~$15K. If your fee percentage is climbing, investigate card mix and international transaction rates.
- Confusing cash spikes with growth. A month with several annual renewals can spike Net Cash Flow 30–50% above MRR. This is timing, not growth. Track the MRR-to-cash-flow ratio over a rolling 3-month window to separate trend from noise.
- Forgetting failed charges. Net Cash Flow only counts successful payments. Failed charges don’t appear — they reduce what should have been collected. High failure rates create a silent gap between expected and actual cash flow.
- Not accounting for refund timing. Refunds reduce Net Cash Flow in the month they’re issued, which may be weeks or months after the original payment. A surge of refunds from last quarter’s charges can depress this month’s cash flow without any change in current business performance.
Frequently asked questions
What is Net Cash Flow in SaaS?
Net Cash Flow is the actual money received from all paid invoices, minus refunds issued and payment processing fees. Unlike MRR, it includes one-time charges and annual prepayments at their full value, and it deducts the real costs of collecting payment. It answers “how much cash actually hit my bank this month?”
Why is my Net Cash Flow different from MRR?
Three factors create the gap. First, annual prepayments — an annual plan is $1,200 in Net Cash Flow the month it’s collected but only $100/month in MRR. Second, one-time charges such as setup fees count toward cash but not MRR, and metered usage counts in full the month it’s paid, while MRR uses the average of each usage customer’s last 3 metered invoices. Third, refunds and processing fees reduce Net Cash Flow but are invisible to MRR. The gap widens with more annual plans and higher fee rates.
What is a healthy fee percentage?
Stripe’s standard rate is 2.9% + $0.30 per charge for US cards. International cards and currency conversion add 1–1.5%. Most SaaS companies see an effective rate of 2.5–3.5% of gross charges. If your fee percentage is consistently above 4%, investigate your card mix — high international volume or corporate card usage drives higher rates.
Does Net Cash Flow include failed charges?
No. Net Cash Flow only counts successful payments (paid invoices). Failed charges never generate cash, so they don’t appear. This means Net Cash Flow can understate expected revenue when failure rates are high. Track failed charges separately to understand the gap between billed and collected revenue.
Should I track Net Cash Flow or MRR?
Both. MRR is the standard for growth tracking, retention analysis, and investor reporting — it normalizes away timing and non-recurring noise. Net Cash Flow is essential for cash planning, runway calculations, and monitoring the real cost of payment processing. When MRR grows but Net Cash Flow doesn’t keep pace, fees or refunds are consuming the gains.
From metric to action
North Metric follows up on failed payments once Stripe’s retries end, with a card-update note to the customers worth keeping. See failed payment recovery.