topic Re: Best practice for contract termination in Tips, Tricks & Best Practices

Best practice for contract termination

maikle — Tue, 14 Mar 2023 04:19:13 GMT

Hello! We are looking for some community advice on what your thoughts are on the best practice for forecasting contract terminations in our pipeline.

We are a telecom company and most of our contracts with customers are 12+ months that auto renew on a monthly basis. We need to be able to include in our pipeline contracts we know will be terminated in the future or even significant future credit notes.

The main issue we have is that a Closed Won stage for a Termination or Credit is confusing to many users. Does anyone have a better way to set up a pipeline to account for these type of forecast items?

Re: Best practice for contract termination

PamCotton — Tue, 14 Mar 2023 15:04:09 GMT

Hello @maikle, Happy Tuesday!

I want to invite to this conversation our top experts to share their thoughts @ChrisoKlepke, @Jnix284, @Phil_Vallender any recommendations to @maikle matter?

Thank you,

Pam

Re: Best practice for contract termination

Jnix284 — Tue, 14 Mar 2023 20:26:30 GMT

Hi @maikle, happy to offer a little insight @PamCotton

Rather than adding additional stages, I would add custom deal properties related to renewals that you can report on, and allow those deals to remain Closed Won, since they were a customer at one point.

I bet @jolle would have a few good ideas for how to manage this scenario.

Re: Best practice for contract termination

maikle — Tue, 14 Mar 2023 20:48:39 GMT

Thank you for the suggestion! In my case there isn't an existing card that's in Closed Won. Only a small portion of our sales people HubSpot but we are hoping to change that soon so there will be a lot of new data going into it. In my scenario it would be a new "Deal" that the BDM wants to forecast as a termination to offset the new contract deals they have in their pipeline.

Re: Best practice for contract termination

jolle — Tue, 14 Mar 2023 21:25:58 GMT

Hey @maikle, thanks for reaching out!

And thanks for the mention, @Jnix284!!

Have you looked into HubSpot's recurring revenue tool at all? This feature lets you report on and forecast revenue relative to start and end dates. There's also some built in functionality for renewals vs straight terminations, in case that's relevant. I think that this would probably be the best representative of active won revenue, and it wouldn't require the creation of an additional deal:

Rep moves the deal to closed/won
Rep configures the respective recurring revenue settings
Those deals are pulled into active deal reporting until they pass the termination date

Hope this helps!!

Re: Best practice for contract termination

maikle — Tue, 14 Mar 2023 21:59:14 GMT

Thank you Jolle! This looks like what I need to prepare for. I'll take a deeper look into this and test out a few different scenarios. Thanks again!

Re: Best practice for contract termination

jolle — Wed, 15 Mar 2023 12:29:40 GMT

You got it!!

Re: Best practice for contract termination

maikle — Fri, 17 Mar 2023 22:26:10 GMT

Hi @Joelle , I took a deeper look and realized that this won't work for our specific case. We're using data from our accounting team for recurring billed revenue but for forecast data it will come straight from the pipeline.

Typically, when a contract expires with us it will roll into a month to month contract and very few will actually terminate the service after expiration. We won't have a card for every single active service but the sales person will want to forecast a termination so I believe a card does need to be created in the pipeline. Is the only solution for us to use the Track recurring revenue function and create cards for all active services?