How to track MRR when deals have multiple recurring line items

[NHancock]

Hi,

We create multi-year quotes, where often years 2 and 3 are at an agreed increased cost (for example £200/month in year 1, £300/month in year 2 and £400/month in year 3).

We can successfully build quotes that reflect this with 3 recurring items (year 1, year 2 and year 3 subscriptions), with year 2 starting 12 months after the initial payment and year 3 at 24 months after the initial payment.

However, when we build a quote this way (with 3 recurring monthly line items), the MRR calculation adds all 3 line items up (£200+£300+£400), however, none of these line items are active at the same time, as such the MRR is never the sum of all 3, it is £200 for the 1st 12 months, £300 for 2nd 12 months and £400 for 3rd 12 months.

Is there any way for the MRR to reflect only which recurring line items are active?

Thanks

[Josh]

Hi @NHancock,

Given your scenario, I believe you'll need to customize this solution a bit (until you move up to Enterprise) vs using the standard line items.  If you only have 1 line item per year, you could use custom properties for Year 1 MRR, Year 2 MRR, Year 3 MRR and probably start/end dates for each as well. This obviously gets tricky if you have multiple line items per year that have variable start and end dates. 

This isn't the perfect solution but it is a potential workaround for now. 

Josh

[NHancock]

Hi @Josh,

Thanks for your response, sounds like there isn't a perfect solution, in your example would we be able to use these properties in the Quote document?  Ideally we'd like to use Line Items as they are then automatically fed into the Quote and Proposal.  These line items would then be used to auto populate MRR, ARR & TCV.  However if this isn't possible in our situation, can you add properties to Quotes instead?

[Josh · Accepted solution]

@NHancock,

You could populate these to the quote, but they wouldn't be in the line items. If I were doing this I would probably:

1. Use line items as you are but with delayed starts for Year 2 and Year 3
2. Populate the custom properties separately on the deal or company record to use for reporting purposes (depending on your reporting needs)

[NHancock]

Thanks @kvlschaefer, we currently do not have an Enterprise licence, I am trying to see if we can get Revenue Tracking as an add-on, but I am assuming that's not going to be possible.

It would help massively manage our closed won MRR/ARR, but the above is also focused on our Quote/Proposal pipeline stage.

The line items work perfectly well if you have a static MRR at proposal/quote stage, but more often than not our MRR will increase over the length of the quote, so this needs to be represented in the quote, but that then breaks the automated MRR calculation.

I welcome any feedback or suggestions if people have found a workaround before!

Thanks

[kvlschaefer]

Hi @NHancock,

Thanks for reaching out to the Community!

I wanted to share this knowledge base article on tracking recurring revenue in HubSpot, in addition to this related community thread where @danmoyle and @Mike_Eastwood offer suggestions on how to track MRR/ARR. 

Hey @danmoyle, @Mike_Eastwood, @Josh - Do you have any advice for @NHancock's use case?

If anyone else in the Community has advice, please feel free to comment as well 🙂 

Thank you! 

Best,

Kristen

[danmoyle]

Thanks for the tag @kvlschaefer. I don't think I can improve on @Josh's suggestion for you @NHancock. That's my best educated guess as well. Custom properties until Enterprise is there.