Glossary: Reporting & Global Terms | Prolifi

This page covers financial reporting, analytics metrics, and global expansion terminology. For other glossary categories, see: Platform Concepts, Billing Terms, Pricing & Subscription Terms, and Payments & Integration Terms.

Reporting Terms

ARR (Annual Recurring Revenue)

Plain-language definition: The total recurring revenue your business generates in a year, normalised from whatever billing frequency your subscriptions use. ARR is the primary headline metric for subscription businesses. A subscription billed at £100/month contributes £1,200 to ARR.

Technical definition: Computed as MRR x 12. Prolifi calculates ARR from all active subscription billing amounts, normalised to an annual value. ARR excludes: one-off charges, usage-based variable amounts (which are reported separately), and non-recurring revenue.

See also: MRR, NRR, Churn Rate

ARPU (Average Revenue Per User)

Plain-language definition: The average amount of revenue generated per customer in a given period. ARPU is calculated by dividing total revenue by the number of active customers. It measures the commercial density of your customer base — higher ARPU means each customer relationship is worth more.

Technical definition: Computed as: total recognised revenue in period / number of active customers in period. Prolifi calculates ARPU on a monthly basis from invoiced and recognised amounts.

See also: MRR, ARR, NRR

ASC 606

Plain-language definition: The US accounting standard (published by the Financial Accounting Standards Board) that governs when and how revenue from customer contracts should be recognised. Under ASC 606, revenue is recognised when — and in proportion to how much — the promised goods or services are delivered to the customer.

Technical definition: FASB Accounting Standards Codification Topic 606. Prolifi supports ASC 606-compliant revenue recognition through configurable recognition rules and recognition schedule generation per invoice. Recognition schedules determine the period-by-period allocation of collected amounts to recognised revenue.

For guidance on configuring revenue recognition rules, see Revenue Recognition.

Audit Trail

Plain-language definition: A complete, immutable record of everything that has happened in the platform — every invoice created, every payment attempted, every plan change made, every entitlement modification. The audit trail is critical for financial compliance and for investigating billing disputes.

Technical definition: Prolifi’s audit trail is a time-ordered, append-only log of all event objects emitted by the platform. Events cannot be deleted or modified once created. The audit trail is queryable via API and exportable for external archiving. Retention period is determined by plan configuration.

See also: Event, Revenue Recognition, Reconciliation

DSO (Days Sales Outstanding)

Plain-language definition: A measure of how long it takes, on average, to collect payment after an invoice is issued. A DSO of 30 means it takes an average of 30 days to get paid. Reducing DSO improves cash flow. DSO is particularly relevant for businesses that issue invoices and wait for manual payment (rather than auto-collecting by card).

Technical definition: Computed as: (accounts receivable balance / total credit sales in period) x number of days in period. Prolifi supports DSO analysis through its invoice and payment timing data. DSO can be segmented by customer, collection country, or billing model.

See also: Invoice, Payment Collection, Reconciliation

IFRS 15

Plain-language definition: The international accounting standard (published by the International Accounting Standards Board) equivalent to ASC 606. IFRS 15 governs revenue recognition under international financial reporting standards, which are used by most businesses outside the United States.

Technical definition: International Financial Reporting Standard 15: Revenue from Contracts with Customers. The five-step IFRS 15 model (identify contract, identify performance obligations, determine transaction price, allocate to obligations, recognise when/as obligations are satisfied) is supported through Prolifi’s recognition rule configuration.

MRR (Monthly Recurring Revenue)

Plain-language definition: The total recurring revenue your business generates in a single month, normalised from all subscription billing frequencies. MRR is the fundamental health metric for subscription businesses — it tells you the stable, predictable baseline of revenue you can expect each month.

Technical definition: Computed from all active subscriptions by normalising each subscription’s billing amount to a monthly equivalent. Annual subscriptions contribute ARR/12 to MRR. Monthly subscriptions contribute their full monthly amount. Prolifi reports MRR as: New MRR (from new subscriptions), Expansion MRR (from upgrades), Contraction MRR (from downgrades), and Churned MRR (from cancellations).

For detailed MRR and financial reporting, see Financial Reports.

See also: ARR, NRR, ARPU, Churn Rate

NRR (Net Revenue Retention)

Plain-language definition: A measure of how well your business retains and grows revenue from its existing customer base. NRR above 100% means that, even without acquiring any new customers, your revenue is growing — because existing customers are upgrading, buying add-ons, or expanding their usage. NRR below 100% means you are losing revenue from your existing base, even if you are adding new customers.

Technical definition: Computed as: (MRR at start of period + Expansion MRR - Contraction MRR - Churned MRR) / MRR at start of period, expressed as a percentage. NRR is calculated over a rolling 12-month window in Prolifi’s standard reporting. An NRR above 100% indicates net expansion from the existing customer base.

See also: MRR, ARR, ARPU, Churn Rate

Reconciliation

Plain-language definition: The process of matching what Prolifi says should have been collected against what the payment gateway actually settled into your bank account. Reconciliation ensures that every pound paid by a customer is accounted for and that no discrepancies exist between your billing records and your bank. It is a critical finance control process.

Technical definition: Prolifi’s reconciliation workflow compares: (a) invoice records in Prolifi (amount invoiced, payment method, date), with (b) settlement records from the connected payment gateway (amount settled, settlement date, reference). Discrepancies are flagged for manual review. The reconciliation report exports matched and unmatched records for accounting purposes.

For a step-by-step guide to reconciliation, see Reconciliation Workflows.

Recognition Schedule

Plain-language definition: A period-by-period breakdown of when collected revenue will be recognised as earned. For a customer who pays £1,200 upfront for an annual subscription, the recognition schedule shows £100 of revenue being recognised each month over the 12-month service period.

Technical definition: A time-series object generated by Prolifi at invoice finalisation, representing the scheduled transfer of amounts from deferred revenue to recognised revenue. Recognition schedules are generated per invoice line item and governed by the recognition rules configured for the relevant product. Each entry in the schedule carries: period start date, period end date, and recognition amount.

Revenue Recognition

Plain-language definition: The accounting principle that determines when collected revenue is counted as “earned” in your financial statements. You cannot always count money when you receive it — if a customer pays annually upfront, you earn the revenue month by month as you deliver the service. Prolifi generates recognition schedules and tracks deferred versus recognised revenue to support compliant financial reporting.

Technical definition: The process by which Prolifi generates recognition entries from finalised invoices according to configured recognition rules. Recognition rules specify: immediate recognition (revenue is recognised at invoice date) or deferred recognition (revenue is recognised over the service period). Recognition entries are exported for import into accounting systems and form the basis of regulation-grade financial reports.

For detailed configuration guidance, see Revenue Recognition.

Global Expansion Terms

Collection Country

Plain-language definition: The country in which a payment is collected. The collection country determines which operating entity and payment gateway are used for a transaction, which payment methods are available, what currency is billed, and what tax treatment applies.

Technical definition: A configuration dimension in Prolifi’s multi-country setup that associates a country code with a specific operating entity, gateway configuration, and tax profile. The collection country for a given transaction is derived from the customer’s billing address or from explicit collection country assignment on the subscription.

For guidance on configuring collection countries, see Multi-Country Setup.

Exclusive Pricing (Tax Exclusive)

Plain-language definition: A pricing approach where the listed price does not include tax. The customer sees the base price and tax is added on top at checkout. For example: product listed at £100, tax of £20 added, customer pays £120. This is common in B2B contexts where customers can claim tax back.

Technical definition: A tax display configuration in which invoice line items show the pre-tax amount, and tax is presented as a separate line item. The customer-facing price is the net price; the gross (total payable) includes tax.

See also: Inclusive Pricing, Tax Treatment

FX Rate (Foreign Exchange Rate)

Plain-language definition: The rate at which one currency converts to another. In multi-currency billing, FX rates determine how prices set in one currency translate when billing in another. Prolifi allows you to configure how exchange rates are handled — whether they use a live rate, a fixed rate, or a configured rate.

Technical definition: The exchange rate applied when converting between currencies in a multi-currency pricing configuration. FX rate management in Prolifi includes: rate source configuration (fixed rate, daily market rate fetch, or manual input), rate rounding rules, and rate validity period.

GST (Goods and Services Tax)

Plain-language definition: A consumption tax similar to VAT, used in countries including Australia, India, Canada, and New Zealand. The mechanics are similar to VAT but the rate structures, registration thresholds, and cross-border rules differ by country.

Technical definition: A tax type configured in Prolifi’s tax engine for jurisdictions using GST. Similar in implementation structure to VAT, but with jurisdiction-specific rate tables and registration requirements. Where a country uses both GST and state-level taxes (e.g., India’s CGST/SGST structure), Prolifi’s tax configuration supports split tax treatment.

See also: VAT, Tax Treatment, Tax Code

Inclusive Pricing (Tax Inclusive)

Plain-language definition: A pricing approach where the listed price already includes tax. The customer sees one total price and no additional tax is added at checkout. For example: product listed at £120, which includes £20 of tax. This is common in B2C contexts and in markets where tax-inclusive pricing is a regulatory requirement.

Technical definition: A tax display configuration in which invoice line items show the gross (tax-inclusive) amount. The tax amount is calculated and displayed separately for accounting purposes, but the customer-facing total does not increase beyond the listed price.

See also: Exclusive Pricing, Tax Treatment

Local Payment Method

Plain-language definition: A payment option that is specific to and popular in a particular country or region. Examples include iDEAL in the Netherlands, SEPA Direct Debit in Europe, Boleto in Brazil, UPI in India, and Alipay in China. Accepting local payment methods significantly improves conversion rates in those markets because customers can pay in the way they prefer.

Technical definition: A payment method type that is configured as available for a specific collection country or region in Prolifi’s payment collection settings. Local payment methods require a gateway that supports the method in the target country. Configuration includes: enabling the method for the collection country, setting currency constraints, and (where applicable) configuring mandate requirements (e.g., SEPA mandate setup).

Multi-Currency Pricing

Plain-language definition: The ability to set and display prices in multiple currencies — allowing you to charge customers in their local currency rather than requiring them all to pay in a single base currency. For example, your Enterprise plan might cost £1,000/month, $1,200/month, and EUR 1,100/month as separately configured prices.

Technical definition: A pricing configuration in which multiple currency-specific prices are attached to a single pricing plan. Each currency price is independently configurable — the amount is not auto-converted from a base currency. Multi-currency pricing requires an operating entity for each currency’s corresponding jurisdiction. Currency selection for a subscription is determined by the customer’s billing locale or explicit currency assignment.

See also: Operating Entity, Collection Country, FX Rate

Prolifi Tax

Plain-language definition: Prolifi’s built-in tax calculation engine. Rather than calculating tax yourself or connecting to a third-party tax service, you configure Prolifi Tax with your tax registration details and product classifications, and Prolifi automatically calculates the correct tax for each invoice based on the customer’s location and the product being purchased.

Technical definition: Prolifi’s native tax calculation module. Prolifi Tax evaluates the combination of: collection country, customer billing address, operating entity jurisdiction, and product tax code to determine the applicable tax rate and calculate the tax amount. Supported jurisdictions and rate tables are maintained by Prolifi.

For detailed tax configuration guidance, see Tax Management.

See also: Tax Treatment, Tax Code, VAT, GST, Self-Calculated Tax

Self-Calculated Tax

Plain-language definition: A tax approach where you calculate the tax amounts yourself (or via your own tax system) and pass them to Prolifi for inclusion on the invoice. You take full responsibility for tax accuracy. This approach is appropriate if you already have a tax calculation system and want Prolifi to display the amounts without performing its own calculation.

Technical definition: A tax treatment mode in which the API caller or integration layer provides explicit tax amounts on invoice creation or subscription configuration. Prolifi does not validate or recalculate these amounts — it applies them as provided. The tax amounts appear as separate line items on generated invoices.

See also: Tax Treatment, Prolifi Tax, Tax Code

Tax Code

Plain-language definition: A classification assigned to a product that determines how it is taxed. Different types of products attract different tax rates in different jurisdictions. For example, digital services and physical goods may be taxed differently in the same country, and a product that is taxable in the UK may be exempt in Germany. Tax codes allow Prolifi to apply the correct tax logic per product per jurisdiction.

Technical definition: A structured attribute on a product that maps to the relevant tax treatment rules in the configured tax engine (Prolifi Tax or third-party). Tax codes follow standard classification systems (e.g., TaxJar product categories, Avalara tax codes, or EU VAT category codes).

See also: Tax Treatment, VAT, GST, Prolifi Tax

Tax Treatment

Plain-language definition: The overall approach you take to calculating and collecting tax in Prolifi. There are three options: you calculate tax yourself and pass the amounts to Prolifi (self-calculated), Prolifi calculates tax for you using its built-in tax engine (Prolifi Tax), or you connect a third-party tax calculation service (such as Avalara or TaxJar) and Prolifi applies those calculations.

Technical definition: A configuration setting at the operating entity or collection country level that determines the tax calculation method: self_calculated (tax amounts provided by the integrating system), prolifi_tax (Prolifi’s native engine, requires jurisdiction configuration and tax code assignment), or third_party (external tax provider integration via API connector).

See also: Self-Calculated Tax, Prolifi Tax, Tax Code, VAT, GST

VAT (Value Added Tax)

Plain-language definition: A consumption tax applied at each stage of the supply chain, collected by businesses on behalf of governments. VAT is the dominant indirect tax structure in the UK, Europe, and many other markets. The rate varies by country and product type. For B2B transactions between VAT-registered businesses, VAT is typically recoverable by the buyer.

Technical definition: A tax type configured in Prolifi’s tax engine for jurisdictions that use VAT. Configuration includes: jurisdiction (country/region), VAT rate, B2B vs. B2C treatment, digital services rules (e.g., EU digital services VAT requirements), and registration number fields for invoice display.

See also: GST, Tax Treatment, Tax Code, Operating Entity