Best Practice for Tracking Recurring Revenue from different Deals

[PAmend1987]

Hello there,

I'm new to Hubspot, but I'm really enjoying its functionality. I need some best practices for setting up our Deals. We have a SaaS platform for Industrial Properties that we bill quarterly and annually. Customers may sign up in March and pay $1000 a year. Then, one year later, they may expand and start paying another $1000 a year for a new recurring total of $2000 a year.

Currently, I have set up both of these as Deals, and it works great. However, when it comes time for invoicing, I'm not sure how to join these two deals together. I've tried using the Association feature, and it joins the two deals together. But, the invoicing piece appears to be missing, as well as the ability to see a list of these industrial properties and their total recurring revenue.

Any assistance would be greatly appreciated. Thank you.

[trevordjones · Accepted solution]

Hi @PAmend1987 ,

In most cases I would view the second contract a year later as a new deal for $2,000, and invoice that $2,000 directly.  Because both deals are connected to the Company and Contact object, you can still see that the customer started out at $1000 and upgraded to $2000 a year later.

This also reflects the fact that in most cases the entire revenue is re-contracted on that second deal.

[trevordjones · Accepted solution]

Hi @PAmend1987 ,

In most cases I would view the second contract a year later as a new deal for $2,000, and invoice that $2,000 directly.  Because both deals are connected to the Company and Contact object, you can still see that the customer started out at $1000 and upgraded to $2000 a year later.

This also reflects the fact that in most cases the entire revenue is re-contracted on that second deal.

[PAmend1987]

Thanks Trevor for your response. The challenge we may run into with this proposed option is we have over 200+ deals we would have to update annually. In addition, some of our customers pay in advance annually and quarterly, while others may pay each quarter.

[ChrisNichols]

Im in the same position, we are a saas compay and my gut feeling is that hubspot do not support subsription tracking for SaaS companies, if you not soly use their payment module and force your customers to pay with credit card/or their invoices. 

Im really trying to figure out how to solve this for my self. 

[trevordjones · Accepted solution]

Hi @PAmend1987 ,

To be clear, I would not propose updating a deal.  Rather, the upgrade is a second deal with a value of $2000.  The old deal still has a value of $1000 and a close date in the prior year.

Then you can create a deals report using the Company Name as the filter that shows two deals: a $1000 deal in year one, and a $2000 deal in year two. 

HubSpot calculates ACV (Annual Contract Value) in year one as the one time fee if applicable, plus 12 times the monthly recurring charge.  So your first contract is worth 12,000 and your second contract is worth $24,000.

If you want to understand the incremental change in revenue from a deal, I would recommend a "Prior Contract Amount" property on your deal with a calculated property to calculate the incremental change in revenue.  In your example Amount - Prior Contact Amount = Net New Revenue.  In this way you know both the total value of the contract and the incremental change.