Schedule Revenue Over Time In Salesforce
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In many businesses, no money changes hands when a deal is won.
Rather, the revenue is scheduled over time.
- Professional services that deliver projects over time.
- Capital equipment items that the customer draws down or pays for over time.
- Maintenance contracts where the revenue spans one, two or three years.
- Software-as-a-Service (Saas) licenses on fixed term or open ended-contacts.
- Transactional or regularly supplied items in which you anticipate the customer will buy a significant volume every month, but with no fixed or guaranteed amount.
In fact, it’s common to have a mix of revenue streams over time on the same opportunity. Often, these are covered by framework agreements that span multiple opportunities.
You need an easy yet powerful way to create and maintain accurate product revenue schedules. Otherwise, you lack robust forecasts and accurate visibility of future revenue.
Many people have told me just how difficult that is to achieve in salesforce.
So, to fix this problem we built the GSP Product Revenue Schedules app.
It’s the quickest, easiest and most effective way for salespeople to schedule revenue over time in salesforce.
In this blog post, I’ll explain why scheduling revenue using standard functionality is difficult in salesforce. And demonstrate EXACTLY how to address this using the Product Revenue Schedules app.
Prefer to jump straight to a demo of the app? Watch this video to see how it works.
Before we get onto the app, let’s understand why the standard salesforce product revenue schedule functionality is a challenge.
Standard Salesforce Product Schedules
One option to schedule revenue over time in salesforce is to use the standard product schedules feature.
This works for some businesses. However, there are also significant limitations which I’ll explain.
Here’s how the standard product schedule function works in salesforce.
The salesperson adds one or more Products to an opportunity in the normal way.
Then, the salesperson creates a Schedule for each product line item. They do this by clicking individually on each product line item, then on the Establish button.
This provides the popup to enter details about the schedule for that opportunity product.
This generates the product schedule that tracks revenue over time for the first product.
However, this process has to be repeated for every additional product on the opportunity.
Advantages of standard product schedules
- Standard functionality. No need to purchase a separate app.
- Scheduled revenue over time can be tracked using reports and dashboards (although this is limited).
Disadvantages of standard product schedules
- The user interface is cumbersome. To say the least. For example, the salesperson drills down to each product separately to create the schedule.
- Schedules can’t be created at the same time as adding the product; they have to be added afterwards.
- 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.
- It’s impossible to customize, adapt or extend the standard schedules. For example, you can’t add a Status field to track Booked, Shipped, Invoiced, Paid values. Likewise, you also cannot schedule by margin or other values.
- There’s zero ability track committed and pipeline revenue over time against target.
The result is that many companies that need to schedule revenue over time in salesforce simply don’t. Unfortunately, this means they lack visibility of future income.
Consequently, they often attempt to resolve this in one of three other ways.
Common alternatives to standard scheduling
Rather than using the standard salesforce revenue scheduling functionality, here’s what many companies do:
They perform this critical activity outside salesforce.
Often, this happens simply because companies perceive it’s too difficult to schedule revenue over time in salesforce using standard functionality.
However, accurate visibility of won and pipeline scheduled revenue based on latest opportunity updates is lost.
Significant effort is also expended, manually forecasting future revenue.
Create numerous fields on the opportunity. These fields capture scheduled revenue for Q1, Q2 and so on for each year.
This is almost always a mistake.
That’s because it’s virtually impossible to produce meaningful reports and dashboard charts. It also significantly reduces usability because its time consuming for salespeople to enter the data.
The third option is to create multiple opportunities in salesforce. Each opportunity typically represents one year of revenue.
For example, let’s say you win a contract to deliver services over three years. That’s one opportunity.
However, companies often create two further opportunities to represent income in years two and three. This, despite the fact that the deal is won, and no further sales effort need take place.
Pipeline reports and dashboard charts are inaccurate. Opportunity conversion rates are wrong. And salespeople waste time maintaining and updating spurious opportunities.
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GSP Product Revenue Schedules app
Tracking revenue over time is so important, yet none of the alternatives cut the mustard.
Its why we built a salesforce app.
This where you can find the GSP Revenue Schedules app on the AppExchange.
Here’s the main features and benefits of the app.
- Very quick and easy for reps to use.
- Accurate forecasts of revenue over time from won and pipeline opportunities.
- Easily compare scheduled revenue over time with targets.
- Schedules and forecasts update automatically when the opportunity information changes.
- Analyse revenue over time by product, territory, salesperson or any other parameter.
And guess what?
The schedules automatically shift whenever the opportunity close date moves.
That means everything is always kept in sync.
We’ve included a webinar recording at the foot of this post to show exactly how the app works.
Or carry on reading for screenshots and more information about how the app works.
(Incidentally, although all the screenshots in this post are in Lightning, the app works equally well in Classic interface).
Create revenue schedules
The salesperson selects products to add to the opportunity the normal way.
As you’d expect, we have the standard Quantity and Sales Price fields. However, we also have two custom fields, Revenue Start Date and # Revenue Months.
These fields allow the salesperson to define the revenue schedule parameters for each product on the opportunity.
Clicking Save adds the products to the opportunity and generates the revenue schedules.
We can click View All to see all the revenue schedules associated with each product.
Adjust revenue schedules
Let’s say the salesperson wants to adjust the revenue schedules.
Hit the Edit Line Items button.
This opens the page that lets the salesperson quickly and easily edit the revenue schedules for all products on the opportunity.
The revenue schedules update immediately.
Close Date Changes
Here’s the most common event on an opportunity:
The close date moves.
We thought it was closing this month. Things are delayed. We need to move the close date to next month.
All the revenue schedules automatically update by the same number of days as the shift in the close date.
This avoids salespeople having to continuously re-align schedules. Therefore, accuracy of revenue forecasting is maintained effortlessly.
Manually adjust product revenue schedules
The GSP Product Revenue Schedules app automatically calculate the schedule amounts. This is based on the parameters set by the salesperson.
However, sometimes its right for the salesperson to manually adjust the revenue schedule amounts, based on human knowledge.
Let’s say, for example, you know that the first monthly schedule will be higher than the others.
Open the Mass Edit Line Item page.
Make the adjustment.
This automatically adjusts the Sales Price of the Product Line Item.
This, in turn, updates the Line Item Total Price and the Opportunity Amount.
In other words, everything is kept 100% in sync.
Update for latest scheduled revenue forecasts
Here’s what happens when the Opportunity is set to Won.
The Schedule Amount is locked.
Because this value represents the product revenues we expect at the point when the opportunity is won.
Something else also happens:
The Revenue Amount is copied into the Forecast Amount.
This means that as time goes by, the Forecast Amount can be adjusted based on how the opportunity revenue is actually panning out.
This means we can compare two things: the revenue we expected to generate alongside the latest actual forecast.
This is critical in many businesses.
For example, let’s say you win an opportunity to sell 100 petrol pumps. The customer wants to take delivery 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.
But suppose the site re-fit program doesn’t proceed as fast as planned. Now, five months into the contract, the account manager updates the Forecast Amount based on the latest information.
Perhaps she even needs to add several new monthly schedules in order to extend the timeframe.
Opportunity level summary
At all times, essential revenue schedule values are summarized back on the opportunity. This include the Revenue Amount, the latest Forecast Amount and the number of schedules.
This means salespeople can quickly and easily view the latest key metrics about the opportunity.
Track revenue over time versus target
Now you can compare scheduled product revenue over time with salesperson targets.
Here’s an example.
This is the target for Jim Jones for April 2019. The product revenue schedules that are due to land in April, automatically link to this target.
Jim has a scheduled revenue target for April of $12,000. Remember, that’s his scheduled revenue target not the gross sales value target.
Jim has scheduled product revenue from won opportunities of $8,333.
So he’s achieved 69% of his target.
Jim also has potential scheduled product revenue of $1,666 from open opportunities. In other words, this revenue is not committed. It relates to the product revenue schedules on pipeline opportunities that we hope will close soon.
We can also see the weighted value of these pipeline schedules: $833. This is the opportunity probability factored into the schedule amount.
This produces the Expected Schedule Amount of $9,167. That’s the total amount Jim can expect to achieve from scheduled revenues in April.
The result is that salespeople and managers can easily see whether there is enough committed and pipeline scheduled revenue to meet quota.
Looks like Jim has some work to do to hit his target!
Product Revenue Schedule Reports and Dashboards
Salespeople and managers need full visibility of pipeline and scheduled revenue. To achieve this, the GSP Product Revenue Schedules app has comprehensive dashboards for salesforce Lightning and Classic versions.
Here’s the Lightning dashboard
And the Classic version.
Users can clone and adapt these charts and reports and customize them to meet additional reporting needs.
S-curve versus straight-line schedules
By default, the app produces straight-line product revenue schedules. In other words, each monthly schedule is for the same amount.
As we’ve seen, the amount for any month can be easily adjusted by the salesperson.
But who on earth needs s-curve schedules?
Well, let’s say you deliver infrastructure projects.
The initial stages of the project are about mobilization and planning. These activities are relatively resource-light. Then you get into the heavy lifting of delivery. Towards the end of the project, its more about testing and commissioning, which requires less overall effort.
This means the revenue profile is an s-curve. Moderate amounts of effort and cost are expended at the beginning and end. More significant work is done in the middle.
The result is an s-curve revenue profile on individual opportunities.
Get in touch if you’d like to find out how to activate s-curve revenue profiles within the app.
Advantages of the GSP Product Schedules app
Here’s a summary of the main advantages of using the GSP app to schedule product revenue in salesforce.
- Super-easy for salespeople to use.
- Flexibility to define different revenue profiles over time for each opportunity product.
- Forecast accuracy is maintained because schedules automatically shift when the close date changes.
- Compare schedule revenue expected when the opportunity is won with the latest post-win forecast.
- Track scheduled product revenue versus target.
- Ability to further adapt the standard app to meet specific scheduling needs within your business.
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