Billing
Invoice-and-pay versus automatic charging
Two ways to collect money for hosting, with different cash flow, different disputes and different failure modes. Which one you have is often an accident.
9 min read · Reviewed 2026-09-21
In short
Count recurring revenue from active services at their current price, normalised to a month, excluding anything one-off and anything unpaid beyond your grace period. Measure churn on customers and on revenue separately, because losing ten small customers and one large one are different events that a single number hides.
Hosting is a subscription business, so the subscription metrics apply — and they are all easy to compute in a way that flatters. The errors below are not exotic; a reporting screen makes them unless somebody decided it would not.
Recurring revenue: what to exclude
Monthly recurring revenue is the sum of active recurring services at their current price, normalised to one month. The word doing the work is recurring.
- Exclude one-off charges. Migration fees, setup fees and hourly work are revenue and they are not recurring. Including them makes a good month look like growth.
- Exclude services beyond the grace period. A suspended non-payer is not revenue, however much you hope.
- Normalise properly. An annual plan at £120 is £10 a month, not £120 in the month it was billed.
- Use the current price. A customer on a legacy rate contributes their rate, not the list price.
- Count in one currency, converted at a stated rate on a stated date. Summing mixed currencies as if they were one number is an easy bug to ship and a hard one to notice.
Churn: two numbers, not one
| Measure | What it answers | What it hides |
|---|---|---|
| Customer churn | How many relationships ended | That the one you lost was 20% of revenue |
| Revenue churn | How much recurring revenue left | That you lost thirty small customers |
| Net revenue churn | Lost revenue minus upgrades | Whether you are growing by retaining or by upselling |
Compute all three. They diverge in useful ways: customer churn rising while revenue churn is flat means you are losing your smallest customers, which is often fine. The reverse is an emergency.
Lifetime value is a forecast, not a measurement
The usual formula — average revenue divided by churn rate — assumes churn is constant, which it is not: it is high in the first months and much lower afterwards. Applied to a young business it produces enormous numbers. If you use it, state the assumption and prefer a cohort view: what did customers who joined in a given quarter actually pay over the following year? That is measured rather than projected.
Counting rules that keep reports honest
- Every figure names its date range and its currency.
- Every figure says what it excludes, not just what it includes.
- A total and its parts are computed from the same source, so they cannot disagree.
- A figure nobody can trace back to rows is a figure nobody should act on.
- Deleted and cancelled records are excluded consistently, not by whichever query was written most recently.
Beware any dashboard whose headline number is bigger than the sum of the rows beneath it. The first suspect is a join multiplying something — and if the same query feeds an invoice, a customer may find it before you do.
The operational numbers that matter more
For a small hosting business, three operational figures are worth watching alongside revenue, because each can show trouble before revenue does: time to first reply on support, count of unresolved provisioning outcomes, and domains expiring in the next thirty days that are not paid. Each one is a small list of specific things somebody can act on today.
Where GENV is
GENV records invoices, payments, credits and billing subscriptions as separate facts pointing at each other, which is what makes a part payment or an overpayment representable rather than forced into a status. Services carry the state that decides whether work may begin, and that state is computed from the same functions on the list and the detail screens so the two cannot disagree — which was, in fact, a bug fixed during development.
Questions
Should I count tax in recurring revenue?
No. Tax is collected on behalf of an authority and is not yours. Report it separately, and be consistent: a mixture is worse than either choice.
What is a normal churn rate for hosting?
It varies enormously by segment and published benchmarks are rarely comparable, because everybody counts differently. Compare against your own previous quarters rather than against a number from an article.
How often should these be reviewed?
Monthly for revenue figures, weekly for the operational lists. The operational ones are actionable today; the revenue ones are only meaningful over several periods.