Revenue leakage is money a company is owed under its contracts but never bills or collects, such as lapsed renewals, unbilled usage, uplifts not applied and invoices that were never sent.
A worked example
An example with made-up round numbers. A subscription business with $5 million in ARR has a 5% renewal uplift written into its contracts. Reps apply it on half the renewals, so $2.5 million renews at the old price and $125,000 a year that the contracts allow is never billed. Ten expansion orders went out without their prorated invoices, at $3,000 each, and one $40,000 renewal lapsed because the notice went out late. That is $195,000, or 3.9% of ARR, lost without a single customer saying no.
Fix the process, not the instance
MGI Research estimates revenue leakage at 3–5% of a typical company’s revenue (analyst estimate, 2025). Finding one missed invoice recovers one invoice; the lasting fix is the step that made it possible. Jobscience used Kugamon reporting to find about $4 million in invoices that had never been sent, then fixed its invoicing process and collected them (Jobscience case study, 2018). Make the renewal uplift the default rather than a negotiation, generate renewals from contract dates, and invoice from the order rather than from a copy of it. More in how to automate renewals and what is quote-to-cash.
In Salesforce
Salesforce holds the deal: the Opportunity, and the standard Contract with its start and end dates. Sales Cloud on its own doesn’t create a renewal from a contract’s end date, apply a price uplift or generate an invoice, so each of those steps depends on someone remembering. The standard Opportunity Amount also ignores term, which understates multi-year deals. Leakage collects where data crosses systems: a CPQ that hands off to an ERP or an external billing platform has to agree with it on every amendment, proration and cancellation, and the gaps hide in the sync. Salesforce CPQ generates renewal opportunities from its contract and subscription records.
How Kugamon handles it
Kugamon closes the hand-offs where leakage usually starts. Releasing an Order creates its Invoices on the account’s schedule, so nobody re-keys a billing line, and every Invoice stays Unsent until someone sends it. With Subscription Management, release also creates the Contract, the Subscriptions and the next Renewal Opportunity. Scheduled jobs send renewal notices and generate renewal orders; Expansion orders co-term, prorate and update the renewal; and the Renewal Price Uplift Percent on the account applies to products flagged for uplift. Contracts roll up ARR, MRR and TCV, and Manage Contracts on the Account shows whether each renewal is trending lower, higher or the same.
Related terms
Source: mgiresearch.com