What is the Rule of 78 anyway?

When I meet people for the first time and we start talking about what we do and I tell them about the new firm we founded, inevitably the first question people ask me is “Just what is the Rule of 78 anyway?” It’s a great question and I’m frequently surprised that more successful business owners, investors and operators aren’t familiar with the concept behind the Rule of 78.

The Rule of 78 is a mathematical proof that has remarkable impact for organizations that generate recurring billing.