Financial Modeling
for Contract - Based Businesses

→ "What's your sales cycle?" — Have the real data, not the optimistic version → "How do you handle payment delays?" — Show your working capital strategy → "What's your renewal rate?" — Explain why it's different from monthly churn → "Show me the downside scenario" — Have it modeled and ready → "When do you hit cash flow positive?" — Know the date and what drives it

Customer segmentation is one of the most underappreciated aspects of B2G financial modeling. Government customers aren't interchangeable — a municipal contract and a federal contract might both involve the same product, but they have completely different sales cycles, payment terms, pricing ceilings, and renewal dynamics. Treating them as one bucket hides the real economics of your business.

There's a common pattern in startup financial models that I've come to think of as the "disconnected spreadsheet" problem. In one tab, you have your revenue projections — customers acquired, contracts signed, revenue recognized. In another tab, you have your team plan — hires by month, salaries, total headcount. The two tabs sit next to each other but never actually talk to each other.

The Verter Studio framework supports six revenue types: one-time fees for setup and implementation, annual licenses recognized over their term, true monthly subscriptions, transaction fees as a percentage of value, usage-based metered revenue, and professional services billed by the hour or project. You can assign different types to different products, different customers, different segments.

Standard SaaS LTV/CAC formulas ignore long government sales cycles, implementation delays, and renewal costs. In B2G, acquisition can take 6–18 months, revenue often starts late, and renewals require selling again. Verter Studio models unit economics with these realities built in — so ratios reflect actual business performance, not flattering assumptions.

B2G companies fail on timing, not margins. Verter Studio models working capital reality by linking revenue recognition, AR/AP delays, and cash availability in one coherent system.