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Hey {{first_name}} 👋, hope you had a great week! In the last issue, we discussed why tracking Cash Runway matters, and now we are moving with the next topic from Financial Metrics content.

Let’s talk about ⬇️

Most SaaS founders think CAC is simple math.

Add up sales and marketing spend. Divide by new customers. Done.

But after working through CAC calculations with dozens of SaaS finance teams, I can tell you that the number most founders are reporting is wrong — not because the formula is hard, but because the inputs are incomplete.

And an understated CAC doesn't make your business look efficient. It just means you're making growth decisions based on a number that isn't real.

Today I want to break down how to calculate CAC correctly, what it's actually telling you, and the 4 metrics you need alongside it to get the full picture.

Let's dig in:

1️⃣ Calculate a Fully-Burdened CAC

2️⃣ Align Your Time Period to Your Sales Cycle

3️⃣ Build a CAC Profile — Not Just a Single Number

4️⃣ Know the 4 Levers That Actually Lower CAC

5️⃣ The Real Challenge With CAC

The goal here is to make sure every dollar that goes into acquiring a customer actually shows up in the calculation.

The formula is straightforward: total sales and marketing expenses divided by total new customers signed in the same period.

Where most founders go wrong is on the expense side. They include base salaries and ad spend — and stop there. A fully-burdened CAC goes much deeper:

Miss any of these and your CAC is understated. Decisions made on that number — hiring plans, ad budgets, channel investments — will be built on a foundation that doesn't reflect reality.

The goal here is to make sure the expenses and the customers you're measuring are actually connected to each other.

This is the most overlooked nuance in CAC calculation — and it's especially dangerous for B2B SaaS companies with longer sales cycles.

If your average deal takes 60 days to close and you're calculating CAC on a single month of data, you're dividing this month's new customers by last month's sales expenses. The two don't belong together.

The fix: match your CAC calculation window to your average sales cycle length. If your cycle is 60 days, use a rolling 60-day view of expenses against the customers who closed during that period. The math is slightly more complex, but the number you get is actually meaningful.

I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.

Ready to level up your finances?

The goal here is to understand what CAC is actually telling you about your growth engine.

CAC in isolation is almost useless. A $15,000 CAC might be excellent for an enterprise SaaS company with $80K ACV deals. It might be catastrophic for a PLG business targeting SMBs at $200/month.

Context is everything. That's why the most useful thing you can build isn't a single CAC number — it's a CAC profile. Here's what belongs in it:

Together, these four metrics give you a complete picture of acquisition efficiency — not just a snapshot.

The goal here is to improve efficiency without sacrificing the growth investments that matter.

Chasing CAC benchmarks across industries is mostly a waste of time — there's too much variability in business models, ACV, and sales motion for external comparisons to be useful. What matters is whether your CAC is trending in the right direction inside your own business.

Here are the four levers that move it most reliably:

Improve retention first. Think of CAC like debt. Poor retention means customers churn before they pay back their acquisition cost — forcing you to rely on new customers to fund both the cost of churned accounts and the CAC for new ones. Investing in customer success isn't just a retention play — it's a CAC management strategy.

Get surgical with paid advertising. Paid media is typically the largest variable expense inside CAC and one of the most optimizable. Review historical campaign performance, evaluate ROAS by channel, and cut what isn't working before adding more spend. An extra dollar into a poorly performing channel raises CAC faster than most founders realize.

Rethink travel. Before the pandemic, sales travel was a meaningful contributor to CAC for many B2B SaaS companies. Remote-first selling proved that deals can close without it. As in-person engagement returns, be deliberate about which trips are actually necessary — and which ones are just habit.

Separate brand spend from acquisition spend. Long-term brand building matters — but it shouldn't be lumped into a CAC calculation for this quarter's new customers. If CAC is climbing, temporarily dial back experimental or indirect channels and concentrate resources on the tactics already showing measurable returns.

Here's what nobody talks about enough: CAC is one of the hardest metrics to actually track in real time.

The data you need lives across three or four different systems. Salaries and commissions are in your HR platform. Ad spend is in your finance tools. Customer counts are in your CRM. Indirect costs — travel, tools, hardware — are buried inside general operating expenses.

There's no system that automatically aggregates all of this and produces a clean CAC number. That's why most companies are reviewing CAC quarterly, sometimes monthly — and even then it's often a few weeks out of date.

The companies that solve this problem early, by connecting their FP&A infrastructure to the relevant data sources and building forward-looking CAC models, are the ones that can actually optimize acquisition spend in real time — instead of discovering a problem three months after it started.

Hit reply and tell me: what's the biggest challenge you have with tracking CAC right now — is it the data, the formula, or something else entirely? I read every response and I'd genuinely love to know.

Chat soon,

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