Many people tell me how it’s difficult to forecast revenue over time in Salesforce.
That’s partly why they often make one of the three scheduling mistakes that I outline below.
Nevertheless, it’s often vital to schedule revenue over time.
That’s because sometimes, no money changes hands when the deal is won.
Instead, income accrues over time.
If you need to know how to schedule opportunity income and forecast revenue over time confidently, then you are in the right place.
Why You Need To Schedule Revenue
Prefer to watch a video? Or scroll down to continue reading.
Revenue schedules spread the total opportunity amount over time. The sequence of schedules defines the income you will receive over many months from a won or pipeline opportunity.
For example, let’s say you win a $12,000 opportunity in April.
However, you don’t receive the $12,000 in April. Instead, the revenue spreads over the following twelve months.
It may even be that there’s a lag between the closing month and the start of the income.
Many types of companies need to track income over time.
- Professional services that deliver projects over time.
- Capital equipment items that the customer draws down or pays for over a period.
- Support or maintenance contracts that span one, two, or three years.
- Software-as-a-Service (Saas) licenses on fixed-term or open ended-contacts.
- Framework agreements, where you know the customer will buy every month, but with no fixed or guaranteed amount.
Sometimes, there’s more than one type of these products or services on a single opportunity.
Forecasting income over time is as essential as measuring booked revenue per month. Maybe it’s even more critical than booked revenue in your business.
That means you need an easy yet powerful way to create and maintain accurate product revenue schedules. Otherwise, you lack robust forecasts and clear visibility of future revenue.
How To Schedule Revenue Over Time
Here are the four ways you can schedule revenue over time in Salesforce:
- Standard Salesforce Product Schedules.
- Create multiple opportunity fields.
- Create different opportunities for each month.
- Use the GSP Revenue Schedules app.
I’ll carefully explain each of these four options.
The GSP app is the quickest, easiest, and most effective way for salespeople to schedule revenue. Use this link to short-cut straight to the details: GSP Revenue Schedules App
Option 1: Standard Salesforce Product Schedules
Option 1 is to use the standard product schedules feature.
That works for some businesses. However, there are some significant limitations. The most important of these is that the user interface is cumbersome and inefficient for salespeople.
Here’s how the standard product schedule function works in Salesforce.
The salesperson adds one or more Products to an opportunity in the usual way.
After that, the salesperson creates a Schedule for each product line item. They do this by clicking on each product line item, then on the Establish button.
The Establish button provides the popup to enter details about the schedule for the opportunity product.
Consequently, we have a revenue schedule that tracks product income over time.
Unfortunately, the salesperson must repeat this process for every other product on the opportunity.
Advantages of standard product schedules
- Standard functionality. There’s no need to purchase a separate app.
- Reports and dashboards. You can track scheduled using reports and dashboards (although this is limited).
Disadvantages of standard product schedules
- The user interface is cumbersome (putting it mildly). For example, the salesperson must create the revenue schedule for each product separately.
- Salespeople cannot create revenue schedules while adding the product; they have to add them afterward.
- If the opportunity close date changes, the schedules do not automatically shift. The result is that the revenue schedules quickly get out of kilter with the opportunity.
- There’s zero ability to track committed and pipeline revenue schedules versus target.
- Reports and dashboard formats the standard schedules are inflexible and hard to use.
The result is that many companies that need to schedule revenue over time in Salesforce don’t. Unfortunately, this means they lack visibility of future income.
Consequently, they often attempt to resolve this in one of three other ways.
Option 2: Create Multiple Opportunity Fields
The second option means you create multiple fields on the opportunity. These fields store the revenue for each quarter or month.
This approach is always a mistake.
The reason is that it’s almost impossible to produce meaningful reports and dashboard charts. That’s because you are adding up data from multiple fields if you want to get a total for the year.
Furthermore, it vastly reduces usability because of the time it takes to enter the data. So my advice is not to do it.
Option 3: Create different opportunities for each month
The third option is to create a distinct opportunity for each month.
For example, let’s say you have a framework agreement with a customer. Each month, they place a new order. With this option, you must create a fresh opportunity each month to record the revenue.
As you can see, there’s much work to create the opportunities. And, of course, it distorts reports that track the win rate and average deal size.
On the other hand, it does deliver better visibility of historical and future revenue than option 2, providing you keep the opportunities up to date.
Option 4: GSP Product Revenue Schedules app
Tracking revenue over time is essential, yet none of the alternatives cut the mustard.
It’s why we built the Revenue Schedules app. It’s listed here on the AppExchange.
Before we get into the detail, the essential things to know about the app are:
- It’s quick and easy for reps to use.
- Revenue schedules from won and pipeline opportunities mean accurate forecasts.
- You can easily compare scheduled revenue over time with targets.
- All schedules update automatically when the opportunity changes. For example, if the Close Date moves, the schedules also move without extra work for the salesperson.
- You can analyze income over time by product, territory, salesperson, or any other parameter.
I recorded a video to show you exactly how the app works. Or scroll down for screenshots and a step-by-step guide to the app.
New video here.
How To Create Revenue Schedules
Using the app, the salesperson starts by adding products to the opportunity the usual way.
You can see the standard Quantity and Sales Price fields. However, this time there are also have two new fields: Revenue Start Date and # Revenue Months.
These fields define how the product revenue will spread over time.
Clicking Save adds the products to the opportunity and creates the revenue schedules.
You can also use the Mass Edit Schedules button to see all the schedules.
How To Adjust Revenue Schedules
Let’s say the salesperson needs to modify the number of schedules or the revenue start date.
That’s straightforward to do.
Hit the Edit Line Items button.
The page lets the salesperson quickly and easily edit all products’ revenue schedules.
Hit Save, and the revenue schedules update immediately.
Moving Schedules When The Close Date Changes
Changes to the Close Date are probably the most common update on opportunities.
In other words, the salesperson believes the deal is closing this month. Unfortunately, decisions get delayed. We need to move the Close Date to another month.
With standard Salesforce product schedules, this is mightily cumbersome. You have to go to each opportunity product and re-establish the schedules.
Of course, no one remembers to do that. Consequently, the schedules are quickly out of kilter with the opportunity lifecycle.
That’s different with our app.
All the revenue schedules automatically change by the same number of days as the Close Date shift. In other words, zero extra effort for salespeople.
As a result, your revenue forecasts are always up to date.
Manually Adjust Product Revenue Schedules
Sometimes the salesperson needs to tweak a straight-line revenue profile.
For example, there’s a ramp-up of revenue in the first couple of months.
Here’s how you do that. Hit the Mass Edit Schedules button.
Make your changes to the product revenue schedules.
You can see the adjusted total shown in red. This number indicates that the amount you have scheduled is different from the original value of the opportunity product line item.
You now have two choices.
The first option is to hit Save straightaway. The app adjusts the line item Total Price to match the new revenue schedule value ($11,250 in this example). That means the value of the opportunity corresponds with the total scheduled revenue. Everything is in sync.
The second option is to hit the Auto Adjust button. This time, we allocate the amount by which you reduced the initial months to the remaining schedules.
This adjustment keeps the original opportunity Amount the same and means the value aligns precisely with the total scheduled revenue.
Again, quick, easy, and straightforward for the salesperson.
Ramped Revenue Schedule Profiles
As you’ve just seen, it’s straightforward to make a change to the straight-line revenue profile.
But what if you need an entirely different profile?
The app comes with a pre-built S-Curve schedule profile. This profile is great for companies where the income at the start and end of the cycle is low and higher in the middle.
For example, many construction companies have this type of revenue profile on building projects.
We can also build custom templates for other types of schedule profiles. These include ramped revenue schedules and serpentine curves, for example, when income is seasonal.
Get in touch to find out more.
Compare Expected Revenue With Actual Income
Here’s what happens when you win the opportunity.
The Revenue Amount passes into the Updated Projection column.
Now you have the option to update this second column with the actual revenue for each month. You can also enter the income you expect to receive in the coming months.
Consequently, we can compare two things: the revenue we expected to generate when the opportunity was won, with the latest forecast based on actual figures and future estimates.
This comparison is critical in many businesses.
For example, let’s say you win an opportunity to sell 200 gas pumps. The customer plans on taking over 12 months, in line with their gas station re-fit program.
Your product revenue schedule defines how you expect to realize the revenue over time. Perhaps you’ve even made some manual adjustments to get it spot-on.
However, suppose the site re-fit program doesn’t proceed as fast as planned. Each month, the account manager updates the Projected Revenue based on the latest information.
It means you have a solid grip on the revenue you expected when the salesperson won the deal and the latest projection based on real-life data.
Revenue Schedule Summary Information
We’ll talk about reports and dashboard charts in a moment. However, first, let’s look at the information that rolls up to the opportunity.
The total value of the revenue schedules is the first field to notice. We can see that it’s the same as the opportunity Amount. In other words, we are scheduling revenue on all the products.
There are a total of 24 revenue schedules.
And the total Forecast Revenue is $11,550.
This figure means we have entered the Updated Projected amounts and expect to receive more revenue than anticipated when winning the deal.
Next, let’s look at the reports and dashboards.
Product Revenue Schedule Reports and Dashboards
Salespeople and many other people in the company need visibility of opportunity revenue over time. This visibility includes tracking revenue recognition using revenue schedules.
The apps’ dashboard gives you that visibility. Here are some examples of the reports and charts included in the dashboard.
Won Scheduled Revenue This FY
The metric on the left shows that $1.4M of scheduled revenue will land this year. Of course, the income may be from opportunities won this year, the previous year (or earlier). In other words, the revenue is landing in this financial year irrespective of when the salesperson won the opportunity.
The chart to the right of the metrics shows the month-on-month revenue for the year.
We can also see $3.5M of revenue due to land this year from open opportunities. These deals are still in the pipeline, but there is revenue due to land this year.
Here’s another perspective. This time we are looking at the Expected Revenue. This figure is the sum of won scheduled revenue plus the weighted value of the pipeline schedules. (The weighted pipeline over time is the scheduled amount multiplied by the opportunity probability).
Remember the $1.4M of won scheduled revenue? The following chart shows that $695K of this is “earned.” In other words, the date the income is due to land is today or earlier.
We can also see the breakdown of won and pipeline scheduled revenue by product family.
And drill down to the underlying report on any chart to see more details.
Of course, you can customize any of these reports and dashboard charts to suit your specific needs.
Want To Know More About Revenue Schedules?
Here are several more steps you can take.
- Take a free trial of the GSP app. Visit the AppExchange to watch the video, see more screenshots, and take a 14-day free trial. Hit the Get It Now button on the Listing to set up your trial (no credit card needed).
- Get in touch for a demo. Let us walk you through the app. We can see whether it does what you need and answer your questions. We can also talk about whether you need to customize the app to meet your specific needs. Use the Contact Us page and enter your details.
- Read more about revenue schedules. We have several other in-depth articles about scheduling revenue over time. For example, try How to Use Product Schedules to Improve Your Revenue Recognition.
You can also, of course, find out about our other apps, including the GSP Target Tracker that measures pipeline coverage and sales performance versus quota.
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