topic Re: SaaS Products - Calculating Deferred Revenue when Deal is Paid Up Front in 💬 RevOps Discussions

SaaS Products - Calculating Deferred Revenue when Deal is Paid Up Front

JPadgett7 — Thu, 30 Jan 2025 02:16:02 GMT

Our company sells software licenses agreements at a monthly rate for 1, 2, and 3 year license terms. Almost all these licenses purchases are billed/paid upfront.

Ex. Customer buys a 1 year license agreement for $29/month

$49/month x 12 months = $588 that is billed and paid upfront.

For accounting purposes, we mark any unearned service revenue as deferred revenue throughout the length of the contract, and earned revenue as recognized revenue. This is calculated monthly.

Ex. after 1 month, the upfront payment of $588 is split between

$49 recognized revenue ($49 for Jan)

$539 deferred revenue ($49 in Feb+ $49 in Mar+ $49 in Apr +...)

After 2 months, the upfront payment of $588 is split between

$98 recognized revenue

$490 deferred revenue

I'm looking for an accurate way to track this through the deal (or an associated custom object) and be able to report this data. I'd like to be able to see the total deferred revenue left on the license agreement as well as tbroken out by month.

On my first pass, I created a "license" custom object that had the monthly rate ($49) as a calculated field property. From here, I created the total recognized and deferred revenue.

The roadblock I am running into is that these fields can only show the total recognized/deferred revenue. For reporting and accounting purposes, I need to be able to look at a specific month (ex. June 2025) and see how much deferred revenue turns into recognized reveue by company/deal/license.

Is there anything I can add to the custom license object that could help calculate this out? I'd like to see a report be able to tell me

Company | Deal Name | License | (Deferred Revenue for that month)

Re: SaaS Products - Calculating Deferred Revenue when Deal is Paid Up Front

DianaGomez — Thu, 30 Jan 2025 16:47:27 GMT

Hi @JPadgett7,

Thanks for reaching out to the Community!

I’d like to invite our experts to join this conversation to see if they’ve worked on something similar or if they can provide any guidance to help you achieve your goal.🙂

Hi @Lucila-Andimol, @JuanGomez0818, @Gilempert, @LautaroDelPlato, Could you kindly share your insights or advice regarding this topic?

Thanks for sharing 🧡

Diana

Re: SaaS Products - Calculating Deferred Revenue when Deal is Paid Up Front

CEvans97 — Tue, 18 Mar 2025 13:57:26 GMT

I'd be interested to see if anyone has an answer to this, we have a similar problem and a huge spreadsheet that's calculating this currently. There must be a way to show this?

Re: SaaS Products - Calculating Deferred Revenue when Deal is Paid Up Front

Upvise — Thu, 03 Apr 2025 19:07:56 GMT

Hi @JPadgett7

You’re on the right track using a custom “License” object to manage recurring revenue over time in HubSpot. But to get monthly breakdowns of deferred and recognized revenue per deal/company/license, you’ll need to go one step further and create time-based data, which HubSpot doesn’t do natively in custom object properties.

Here’s a workaround approach:

Option A: Custom “Revenue Schedule” Object

Create a custom object called Revenue Schedule with the following properties:

• Month (e.g. “2025-06”)

• Recognized Revenue

• Deferred Revenue

• Linked License (association)

• Linked Deal (association)

• Linked Company (association)

For every license sold, auto-generate a set of 12 / 24 / 36 Revenue Schedule records (depending on term) using:

• A workflow + custom code action (requires Ops Hub Pro)

• Or an external script that uses HubSpot’s API to batch-create those entries

How to Populate the Revenue Schedule:

Let’s say a deal is billed $588 for 12 months starting Jan 2025.

You’d create 12 Revenue Schedule records like:

MonthRecognizedDeferred

Jan 2025	$49	$539
Feb 2025	$49	$490
Mar 2025	$49	$441
…	…	…
Dec 2025	$49	$0

Reporting

Once the data lives in HubSpot objects:

• Use custom object reports (by Month)

• Filter by Revenue Schedule.Month = "2025-06" to get revenue state in June

If full automation is too much:

• Use the license object with calculated properties (like you have)

• Store the full schedule in Google Sheets/Excel

• Sync in monthly totals to HubSpot via Operations Hub data sync or custom fields

Let me know if you want help writing the custom code or logic for the Revenue Schedule creation.