How Subscriptions Work

A Subscription defines the dates a customer can access products or services sold on one or more opportunities. Subscriptions also control the period for which Monthly Recurring Revenue (MRR) records are created.

The relationship between Products and Subscriptions

By default, a one-to-one relationship exists between a product held by a customer and a Subscription. System administrators can adjust setup parameters to enable connected products to appear on the same Subscription (see below).

One Product per Subscription

Using the standard settings within the app, if a customer purchases, for example, five different products, they will have five Subscriptions. The Start and End Dates on each Subscription define when the customer can access these products.

Of course, the customer may purchase the same product on multiple occasions.

For example, the customer buys ten licenses for your SaaS app today and five more licenses in six months. The additional licenses purchased by the customer are added to the same Subscription because they are for the same product.

In contrast, if the customer purchases fifteen licenses for a different app you sell, a new Subscription is created because this is another product.

Multiple Products per Subscription

There are some situations when you want multiple products to link to the same Subscription.

For example, when you retire one product and replace it with another, you need the customer to retain the existing Subscription rather than create a new one.

Alternatively, you may have multiple components within a subscription-based product you want to link. In other words, the customer cannot cancel one component without cancelling all items.

The app handles this by enabling system administrators to create connections between products. When a user adds a connected product to an opportunity, the two or more items link to the same Subscription.

You can find step-by-step details for setting up this feature in Linking Multiple Products To The Same Subscription.

How Subscriptions get created

A Subscription is created when a salesperson adds a product to an opportunity and:

• The Subscription Product checkbox on the product is True.
• There is no existing Subscription on the Account for the same product.

In other words, the product is identified as a Subscription product, and the customer does not already have a Subscription for the specific item. If the customer does have an existing Subscription for the product, then the latest opportunity product will link to the current Subscription.

Remember, Subscriptions are created for products on both won and pipeline opportunities.

How Subscriptions get deleted

Setting an opportunity to a Closed Lost stage automatically deletes the Subscription, providing no other opportunity products are already linked to the Subscription.

In other words, if products from other opportunities are linked to the Subscription, setting an opportunity to a Closed Lost stage will remove the relationship between the opportunity product for that opportunity. However, the Subscription will remain in place because opportunity products on other opportunities are linked to the Subscription.

The same logic applies when you delete an opportunity product. The Subscription is deleted, providing no other opportunity products are already linked to the Subscription.

Incidentally, reopening a Closed Lost opportunity and setting it to a pipeline stage will automatically create a new Subscription, provided the Account does not already have a Subscription for the same product.

Critical Subscription fields explained

There is a full list of fields on the Subscription object in the References section. For now, let’s explain several essential fields.

Start Date and End Date

The Start Date and End Date fields on the Subscription define when the customer can access the product or service linked to the Subscription.

These dates are blank when the opportunity is in the pipeline (assuming no products from won opportunities already link to the Subscription). That’s because the customer cannot yet access the products and services on the Subscription.

However, when you set the opportunity to a closed won stage, the Start and End Dates on the opportunity product automatically populate onto the Subscription.

Status

The Status of the Subscription is driven by the Start Date and End Date in relation to today’s date.

For example, if today’s date is before the Start Date, the Status will be Pending. When today’s date matches the Start Date, a background process automatically sets the Status to Active.

Likewise, if today’s date is after the End Date, the Status will be Expired or Cancelled.

MRR Start Date and MRR End Date

The MRR Start Date and MRR End Date define when Monthly Recurring Revenue (MRR) records are created for the Subscription.

These dates often differ from the Start and End Dates because MRR Schedules are created for pipeline and won opportunities. In contrast, the Start and End Dates are only populated by opportunity products on won opportunities.

If a product on a pipeline opportunity links to the Subscription, then the Start and End Dates will be blank (providing no product from a won opportunity links to the Subscription). However, the MRR Start Date and MRR End Date will be populated. In other words, MRR Schedules are created for pipeline opportunities so that we can measure future potential MRR.

The principle carries through to renewal opportunities. Remember, the renewal opportunity will be in the pipeline stage. As a result, the Subscription will have MRR Schedules relating to the Active period for the Subscription (driven by the Start and End Dates) plus the period covered by the renewal opportunity.

How the MRR fields are populated and when they change is further explained in How MRR Schedules Work.