List-price LTV is lying to you. Count what cleared instead.

Most LTV calculations start the way everyone sketches it on a whiteboard: list price × months active. Clean, fast, and quietly optimistic.

The problem is what that formula assumes — that every month you "have" a customer, you actually got paid. You didn't. Cards fail. Subscriptions lapse mid-cycle. You issue a refund three weeks after the charge. Recurring revenue runs on a clock, and a real number of those ticks never clear the bank. List-price LTV ignores all of that and hands you a flattering total.

The honest version comes from the ledger, not the price sheet:

• LTV per customer = net succeeded charges − refunds.

• Not what you invoiced. What actually settled.

• Recurring and one-off roll up the same way — from money that cleared, not money you're owed.

Why it matters: the convenient version of a number doesn't just lose precision, it points you the wrong way. If list-price LTV says a cohort is healthy and the ledger says it churned in month two, you'll keep spending to acquire more of it.

The ledger-true number is usually smaller. It's also the only LTV figure worth defending — to yourself, or to anyone reading the books.

Rule of thumb: if a revenue metric was defined for convenience, assume it's flattering you until you've checked it against what actually cleared.