Revenue Leakage
Revenue leakage is the unintentional loss of earned or expected revenue due to billing errors, pricing misconfigurations, failed payments, contract non-compliance, or operational process gaps.
Unlike churn — where customers intentionally leave — revenue leakage happens when customers intend to pay but are incorrectly billed, not billed at all, or billed less than their contracted amount. B2B SaaS companies typically lose 3-5% of Annual Recurring Revenue (ARR) to leakage, while professional services firms can lose 5-8%.
Revenue leakage is often invisible in standard financial reporting because it doesn't show up as a distinct line item. It hides within aggregate metrics — slightly lower ARPU, slightly higher churn, slightly lower margins — making it difficult to detect without dedicated analysis tools.
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