Hello Community Members!
We use the MRR report a lot. I think it’s great, for the most part. Maybe I have misunderstood something, but I think the upgrades, downgrades, new business, and renewals are slightly confusing.
By default, we make one-year deals, sometimes multi-year. But we can do an upsell mid-term. The question is, is it enough to create just three deals where:
- First is the new deal (e.g. 1000€ MRR, in Jan 2025)
- Second is a 500€ MRR upsell in July
- Third is a renewal that covers both?
Or, does the Upsell need to end the original deal as an upgrade mid-term, which would still result in just three deals, but more complicated math. Or, do we need two different renewal deals: one for the original deal and another for the upsell?
I would prefer the first option, since customers would only pay for the extra six months on the upsell, and the “original deal” would be valid until the end of the original term.
The confusing part comes with the report details where you can click, for example, the Existing Recurring Revenue amount from the table and it will show you all the deals that are included in the total number. When will it show the original deal, when an upsell, or renewal is strange to me. And it’s often hard to validate the numbers. Making sure those are correct.
We have quite a lot of data already in the system, and I want to know exactly how this works before starting to make any changes to the data.
If anyone has more experience and working examples on this, I’d like to learn more about it before changing the way we record deals in the system. Especially the mid-term upsells are in question here.
Thanks,
Mikko
Hey @mikkishub - thanks for posting in the Community!
I’d like to tag in some reporting experts to see if they have any best practice insight for you! @beeginman, @CoJoNF, and @GCasali - any insight for @mikkishub here?
Shane, Community Manager
Thanks @STierney!
Best practice approach for our setup would be highly appreciated. To clarify, we have:
- Different products with different license subscriptions/levels
- Minimum 1-year deals, except mid-term upsells
- Payments are annual, so no monthly billing, but we still follow MRR as a key metric
- An upsell can be an expansion of the license for the current product, or a new license to a new product (we consider this an upsell, not new business, since the customer is the same)
In MRR reporting, mid-term upsells can indeed create confusion. Typically, the base contract continues until its end date, while the upsell is tracked separately for the remaining months of the term. This way, you don’t have to split the original contract or create multiple renewals which means it’s usually sufficient to record the original deal, add the upsell as a separate line, and then have a single renewal that reflects the combined amount moving forward. How these transactions appear in the report depends on whether the system categorizes them as “existing,” “new,” or “expansion” revenue at each stage.
To make this tracking process easier, I’d also recommend using external tools to help with this. I personally find it easier to export all of my desired metrics to a spreadsheet. With Coefficient, you can bring all of your deal and revenue data into Excel or Google Sheets directly from your CRM or subscription system. This gives you full flexibility to model renewals, upgrades, and downgrades exactly how your business tracks them. You can customize your MRR logic, validate numbers more transparently, and even automate refreshes so your reporting always stays accurate without manual adjustments. Hope this helps!
Thank you @victoriahcw for your insights and recommendations.
