Hubspot's Annual Recurring Revenue Not Reflecting Accurately

[TWatkins9]

Hi all,

We are newer to using line items, and we are running into an issue when setting up multi-year deals.

For the deal below, we added two line items, one to start this year on 6/30/2023, and another to start on 6/30/2024 (so two line items, billed yearly consecutively.

The price increases from 55,000 in the first year to 75,000 in the second year.

Currently, the ARR/MRR are reflecting both line items combined (so two years into one).

How do we fix this? What is best practice?

[--Frank--]

Struggling with the same challenge. I will already be acceptable when the calculation takes the TCV devided by the total duration. Especially strange as HS does show the correct amount in the Future Payments. So the data is there, just the total ARR is calculated very wrong.
I now end up with reports that show more than double the actual ARR value when amounts change during the calculated periods. 

[ZoeTrem]

The value of the MRR is wrong. It takes every line items total and divide them by the number of term length and sum everything. It's totally unusable. I've contacted technical support that tells me that it's normal because Hubspot has been set up like that. Here is a common example of everydays life

Let's say you've sold

• Year 1:
  • mobile abonment
  • 10€/month --> 120€/year
  • term length 1 year
• Year 2
  • mobile abonment combined with a internet abonement
  • 100€/month --> 1200€ per year
  • term length 1 year

Hubspot will calculate :

- MRR = 10€/month + 100€/month = 110€/month.

Annual revenue of 1320€/year.

Which is completly false

MRR year 1 = 10€/month

MRR year 2 = 100€/month

Average MRR = 55€/month

Average ARR: 660€

--> Hubspot can't be used for sales revenues if you have deals with different earning each year. Do you have any recommandation of other tools ? Maybe salesforce ? 

[KG247]

We are having the same issue, only that we have an increase in price after 6 months. A solution would be a separate Deal with the difference of both values as an ARR and having it start after 6 months, but that just can't be how it is supposed to be.

[Welho]

Struggling with the same issue. For multi-year deals with different discounts per year one is forced to use separate Line Items with different start dates, however this throws off the ARR and MRR calculations as it doesn't take into account the start dates and term lengths of the individual Line Items. Instead it adds up all individual line item's ARRs and sums them up as the total ARR of the deal, which makes no sense at all!

All it would take to fix the problem is that the deal level ARR/MRR calculations would be based of actual Start- and End dates of the Line items.

[EwaWard]

Hi @TWatkins9,

Looking at your screenshot, I cannot see anything wrong with data you have entered, therefore my next step would be to contact HubSpot Technical Support to check for any bugs or issues in the system.

Best to contact them via your portal and then clicking the blue "Help" speech cloud that should pop up in your right bottom corner, then choose "Contact support". Fingers crossed they can help!