My company bills annually for 12-month subscriptions; however, we frequently have a pro-rated period at the start of an agreement to align our billing cadence with the customer's fiscal year. For example, we may sign a contract on March, but the customer's fiscal year (and budgeting cycle) is July 1 - June 30 each year; therefore, rather than signing a 3-year (36 month) deal, we instead sign a 40-month deal.
Here is an example where the customer has a 40-month agreement for a product that costs $12,000/year:
HubSpot will not allow us to set the Term to be 40 months (it says that we can only use multiples of 12 when the Billing Frequency is Annually). Is the "correct" way to enter this then as shown in the screenshot above, where:
There is a 4-Month Line Item for the subscription product that is billed At Payment. Billing Frequency is set to One-Time so that it does not mess up the ARR calculations (even though it is technically a subscription product)
Then there is a 36-Month Line Item that has a delayed Billing Start Date of July 1. Billing Frequency is Annually
Any expert guidance here from those in the community who also have a similar situation would be gratly appreciated!
Also, if anybody else has anything to add and/or share, please feel free to join in the conversation 🙂
Thank you very much and have a great day!
Best, Bérangère
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