In addition to revenues, there are a couple of other features related to expenses of a B2B SaaS forecast model that differs from other tech models. Since no product is manufactured, the cost of goods is often referred to as cost of sales and other direct costs associated with running a subscription service that is distributed over the internet. The costs are as follows, one hosting applications which relates to cloud hosting and storage. Two, customer service and support, including items such as a tech help desk, employee salaries and training, and three payment processing fees. These items are typically forecast as a percentage of the monthly recurring revenue or MRR. That is the recurring revenues only, not total revenues.

The core operating expenses cover research and development, sales and marketing, and general and administrative G&A. These are all typically forecast as a percentage of total revenues. The largest category is typically marketing and sales as building a top-notch sales team. To drive new MRR generation is a key driver in raising capital from new investors and building shareholder value.