This guide also applies to on-premise implementations

8Managing Sales Revenue

This chapter contains the following:

Sales Revenue: Overview

Sales revenue in opportunities reflects the potential income of a company. Companies use opportunity revenue data to analyze their sales pipelines and win/loss trends, manage the performance of their resources, and generate revenue forecasts.

Summary of Features

The key features of managing sales revenue in opportunities are:

  • Adding to an opportunity products and product groups the customer is interested in

  • Entering revenue amounts, which then potentially become forecasted revenue

  • Setting revenue-line product attributes, such as forecast inclusion, price, quantity, close date, and win probability

  • Managing recurring revenue items, such as services or training plans

  • Allocating and managing the sales credit amounts that opportunity team members receive

Revenue Line Items: Explained

Revenue items are products, services, or other items a customer might be interested in purchasing. You add revenue items by selecting a product group or product to associate with an opportunity. Revenue items are summed to calculate the opportunity revenue.

Revenue Item Pricing

When you create a revenue item, you can add a quantity and an estimated price. The application calculates the revenue by multiplying the estimated price by the quantity. You also can enter the revenue directly.

Note: When you update the revenue amount, the application does not update the quantity or estimated price.

Managing Opportunity Revenue

You can add revenue items to opportunities and then update the revenue lines as needed. Revenue items are products or product groups with certain attributes, such as amount and quantity. The data from revenue items is used in several business intelligence reports, and is used to forecast expected revenue.

Adding Revenue Items

Use the following procedure to add a revenue item (product or product group) to an opportunity.

  1. Sign in to the application as a user with access to opportunities, such as a salesperson or sales manager.

  2. Navigate to Opportunities.

  3. Find an opportunity and edit it.

  4. In the Products region (Revenue Items in desktop UI), click Add to add a row to the table.

  5. In the Type field, select Group if you are adding a product group. Select Product if you are adding a single product.

    Note

    Depending on your implementation, you may have the option to browse the sales catalog. The catalog contains the same product groups and products as those accessible from the table.

  6. Select the Name list, and then select the product group or product.

    If the product group or product if it is not in the recently used items list, access the Search page by clicking the Search link in the Name list.

  7. In the Search page, the product groups or products you have access to are automatically filtered by the products in your sales territories. To search all products in the database without the territory filtering, deselect the Filter by Territory option.

  8. Select the product group or product and click OK to return to the Products (Revenue Items in desktop UI) table, where you can set other attributes of the revenue item, such as quantity, prices, and so forth.

    The product attributes available in the simplified UI are a subset of those available in the desktop UI. The tables in this topic explain which attributes are available in which UI.

  9. Save your work.

The following table explains the revenue item attributes available in the simplified UI.

Revenue Field Description

Type

Select either product group or product.

Name

Use to select a product or product group. If individual products are not implemented, then only product groups are available.

Quantity

Enter values in whole numbers. The application multiplies this field by Estimated Price to calculate the revenue amount.

Estimated Price

Enter estimated price per item. The application multiplies this field by Quantity to calculate the revenue amount.

Amount

The application calculated this field from price multiplied by quantity, but can be overridden.

Currency

The initial value is based on the opportunity-level currency. If multiple currencies are implemented, you can pick a different currency.

Sales credit

Use sales credit to specify who gets revenue and nonrevenue credit for the sale.

The following table explains the additional revenue item attributes that are available in the desktop UI:

Revenue Field Description

Close Date

Use to indicate the expected close date of the revenue item. The initial value is the opportunity-level close date.

Forecast

Displays a check mark if the revenue item matches forecast criteria. Updated as soon as any of the following attributes are changed, without waiting for you to save the record: Product Group, Quantity, Estimated Price, Revenue, Win Probability, Revenue Type, Expected Revenue, and Status.

UOM (Unit of Measure)

The initial value is based on the product or product group selected. The application picks the first UOM for the item in the list.

Revenue

The application calculates this field by multiplying price by quantity, but can be overridden.

Status

Use to set the revenue line status, such as Open or Won.

Win Probability

The initial value is the opportunity-level win probability, but can be overridden.

Best Case

The initial value is the revenue amount for the item or group (providing Revenue is greater than Best Case).

Worst Case

Use to set a worst case revenue amount.

Include in Forecast

The application sets the initial value to When matches forecast, if forecasting criteria have been enabled. Can be overridden to Yes (meaning always include in forecast) or No (meaning never include in forecast), if forecasting criteria override has been enabled.

Territories

Displays the territories assigned to the revenue items. You can drill down into the field to view all of the associated territories.

Competitor

You can set a competitor at revenue line level. The choice list is limited to those associated at the opportunity level. Depending upon your implementation, you may be required to enter a competitor when setting an opportunity or revenue item to closed.

Win/Loss Reason

When a revenue line or the opportunity is closed, use this field to specify why the revenue was won or lost.

Actual Close Date

This is a read-only field set by the application automatically when you sets a revenue item to a closed status.

Removing Revenue Items

You can remove any unneeded revenue items from the Products (revenue) table using the following procedure.

  1. Sign in to the application as a user with access to opportunities, such as a salesperson or sales manager.

  2. Navigate to Opportunities.

  3. Find an opportunity and edit it.

  4. Simplified UI: In the Products region, click the delete in the applicable table row. Desktop UI: In the Revenue Items table, select the row to be deleted and click the delete icon.

  5. Save your work.

Assigning Sales Credits: Explained

Companies use sales credits to report on salesperson performance and quota attainment, to aid in compensation calculation, and to facilitate forecasting by territories. Sales credit recipients and revenue amounts roll up the resource hierarchy for pipeline reporting and quota attainment.

You assign sales credits against individual revenue items using the Assign Sales Credits screens. When a revenue item is first added to an opportunity, the application sets the user who added it as the sole sales credit recipient receiving 100 percent of the sales credit.

Revenue Sales Credits

When assigning revenue sales credits, keep in mind:

  • Only internal resources are eligible as revenue credit recipients.

  • Revenue sales credits must add up to 100 percent.

  • The Forecast Territory can be set to any territory assigned to the revenue item with Revenue or Revenue and Nonrevenue Forecast Participation.

Nonrevenue Sales Credits

When assigning nonrevenue sales credits, keep in mind:

  • Both internal and external (for example, partner) resources are eligible as nonrevenue credit recipients.

  • Nonrevenue sales credits do not need to add up to 100 percent.

  • If the selected Allocation Style is Proportional to Revenue, the sales credit amounts adjust automatically and proportionally when the revenue item amount changes.

  • If the selected Allocation Style is Ad Hoc Amounts the sales credit amounts do not change with revenue item amount changes.

  • The Forecast Territory can be set to any territory assigned to the revenue item with Nonrevenue or Revenue and Nonrevenue Forecast Participation.

Note

Territories with a Forecast Participation of Nonforecast are not eligible to be set as the forecast territory on either revenue or nonrevenue sales credits.

Revenue Line Syncing with Opportunity Win Probability: Example

When you change the win probably percentage on an opportunity, the application automatically resynchronizes any revenue items whose win probability percentages were previously in sync with the opportunity win probability.

Scenario

The following example illustrates the behavior:

  • Opportunity win probability is 50%.

  • Revenue item 1 win probability is 50%.

  • Revenue item 2 win probability is 50%.

  • Revenue item 3 win probability is 40% .

You change the opportunity win probability to 60%. The application automatically changes the win probability for revenue items 1 and 2 to 60% as well, because they were previously in sync with the opportunity-level win probability.

The win probability for revenue item 3 doesn't change, because it was not previously in sync with the opportunity-level win probability.

Syncing Behavior of Opportunity and Revenue Attributes: Explained

Opportunities and their revenue items share common attributes, for example, status or win probability percentage. For several attributes, under certain conditions, the application automatically synchronizes them so that they are the same. In addition, the application updates certain opportunity and revenue attributes based on the values of other attributes.

The attributes that the application synchronizes or updates automatically are:

  • Win probability

  • Close date

  • Include in forecast setting

  • Status

  • Win/loss reason

  • Competitor

Note

An attribute is said to be in sync if its opportunity and revenue item values are the same, and if the revenue item is in the same status category as its opportunity. If a revenue item and its opportunity both have undefined values, they are considered to have the same value.

Opportunity and Revenue Attribute Synchronization

The application synchronizes certain revenue item attributes based on the opportunity-level attribute, under certain conditions.

Synchronization occurs for the following attributes:

  • Win probability

  • Close date

  • Include in forecast setting

  • Status (not status category)

Consider the following example of close date synchronization:

  • An opportunity with an Open status category has a close date of July 14, 2014.

  • Revenue items 1, 2, and 3 have the same close date and they are in the same status category.

  • Revenue item 4 has a different close date, but the same status category.

  • The close date of the opportunity is changed to August 14, 2014. The application automatically sets the close dates of revenue items 1, 2, and 3 to the same close date as that of the opportunity. The close date of revenue item 4 remains unchanged, because it has close date that was not already in sync with that of the opportunity.

Opportunity Status Updates

The following scenarios explain the behavior when opportunity status is updated:

  • Opportunity status is updated to a Won status:

    • The application updates the opportunity win probability to 100 percent. It also updates all in-sync revenue lines' win probability to 100 percent.

  • Opportunity status is updated to a Lost or No Sale status:

    • The application updates the opportunity close date to the current date. It does not update the close date on in sync revenue lines.

  • Opportunity status is updated from an Open status to a Closed status:

    • The application enables the opportunity win/loss reason attribute.

    • If an opportunity primary competitor has been defined, the application updates the revenue competitor to the opportunity primary competitor for all opportunity revenue items, if they are not already defined. This behavior applies only to the close opportunity and mass update opportunities flows.

  • Opportunity status is updated from a Closed status to an Open status:

    • The application disables the opportunity win/loss reason attribute.

    • The application sets the opportunity win/loss reason attribute to "undefined". It does not update the win/loss reason on in sync revenue lines.

Revenue Item Status Updates

The following scenarios explain the behavior when revenue item status is updated:

  • Revenue item status is updated to a Won status: The application sets the revenue item win probability to 100 percent.

  • Revenue item status is updated to a Lost or No Sale status: The application sets the revenue item close date to the current date.

  • Revenue item status is updated to a Closed status: The application enables the revenue line win/loss reason attribute.

  • Revenue item status is updated to an Open status:

    • The application disables the revenue item win/loss reason attribute.

    • The application updates the revenue item win/loss reason attribute to "undefined".

Opportunity Win/Loss Reason Updates

When an opportunity is in an Open status, the opportunity win/loss reason attribute is disabled. Win/loss reason is activated when the opportunity is set to a Closed status. When the opportunity win/loss reason is updated, the application updates all opportunity revenue items where the win/loss reason attribute is in sync.

Opportunity and Revenue Competitor Updates

If a primary competitor has been defined at the opportunity level, when the opportunity status changes from an Open status to a Closed status, the application updates the revenue item competitor to the primary competitor for all items that don't already have a competitor.

Tip

If a revenue item without a competitor is set to closed and the opportunity is saved, the application displays a dialog box that allows the user to copy the opportunity primary competitor to the revenue items without competitors.

This above behavior applies only to edit opportunity and close opportunity flows, not to the mass update flow.

Recurring Opportunities: Overview

Recurring opportunities let sales representatives enter and track opportunity products or product groups that are part of a subscription business model.

The subscription business model applies to the sale of goods, software, or services where the customer is required to pay a subscription price for access to the goods, software, or services, with additional usage or pay-as-you go charges in some cases. Some examples are:

  • Data and phone services

  • Credit collection or payment processing services

  • Software, platform, or data-as-a-service costs

  • Magazine subscriptions

  • Product life cycle costs

  • Engineering and infrastructure services

The subscription model can encompass both business-to-business (B2B) and business-to-consumer (B2C) customers. For example, a telecommunications company may sell mobile phone services to individuals, and multiple phone lines to a business for their employees. The supplier of these services typically charges the customer a periodic rate applicable to the plan that they subscribed to.

After a sales representative defines a schedule for a subscription product or service, the application automatically creates the recurring transactions from the frequency and the number of transactions specified in the schedule. There are several time frequencies to choose from, such as weekly, monthly, quarterly, yearly, etc. The multiple frequencies make it easy to set up a recurring schedule, like a monthly subscription for three years, or a bi-weekly annual subscription. Sales representatives can review the automatically-created schedule and quickly add a one-time registration or installation fee, and adjust the amount or date of any transaction.

Subscription changes are easy to manage. If there is a change in the terms or price of the subscription, sales representatives can quickly define a new schedule to replace the previous one. If the original subscription is extended, say, for another year, sales representatives can easily extend the existing schedule on the product for the desired period.

Product amounts from recurring schedules are summed into the corresponding quarterly or yearly periods, and are readily available in pipeline reports and forecast rollups for sales representatives and sales managers.

Working with Recurring Opportunities

Recurring opportunities let you enter and track opportunity products or product groups that are part of a subscription business model. Use the procedures in this topic to create and maintain recurring revenue schedules in opportunities.

Note

Recurring opportunities functionality is available in the simplified UI only if your administrator has enabled it.

Creating a Recurring Revenue Schedule

Use the following procedure to create a recurring revenue schedule for a product or product group in the opportunities UI.

  1. Sign in as a sales end user, such as a sales representative or sales manager.

  2. Click Opportunities.

  3. Edit an opportunity by clicking on the hyperlinked name in the list. Or, create an opportunity and enter the required details.

  4. In the Products table, click the Add button and enter the details about the product or product group.

  5. In the Schedule column, click the add icon (plus sign). The Set Schedule page appears.

    Enter data into the fields, using the guidance in the following table.

    Field Guidance

    Frequency

    Select a frequency that the revenue should be generated for. Note that:

    • Bi-Weekly is twice a month (every two weeks)

    • Bi-Monthly is every other month

    Start Date

    • The default date is opportunity close date.

    • You can update the field to any other value (equal to or later than current date).

    End By

    Enter the number of transactions or a calendar end date.

    Quantity

    Enter quantity of the product or product group being sold, as a whole number.

    Amount

    Enter the amount of the product or product group being sold.

  6. Click Next. The Manage Schedule page appears. Note the following behavior:

    • The appropriate number of transactions are created based on frequency, start date, and number of transactions or end date.

    • The close date on each transaction is set to a value derived from the combination of frequency, start date, and end date.

    • Quantity and amount are repeated for each transaction.

    • Other values (like status, win probability percent, product, currency, etc.) are cascaded from the parent revenue line.

    • Transactions are ordered by ascending close date by default.

    • Total quantity and amount are displayed for the schedule. Total amount shows the applicable currency symbol of the product currency.

  7. Review the transactions in the schedule and adjust as needed.

    You can add a schedule transaction row by clicking the Add button and entering the required information.

  8. Click OK to save the schedule. The application returns to the edit opportunity page.

  9. Click Save or Save and Close to save the changes.

Managing Scheduled Transactions

All other of the other actions you can perform with an existing recurring schedule are done in the Manage Schedule page, available by editing the schedule.

You can:

  • Edit the existing transactions in the schedule.

  • Extend the schedule by entering new dates.

  • Replace the schedule altogether.

  • Delete the schedule.

Use the following procedure.

  1. Sign in as a sales end user, such as a sales representative or sales manager.

  2. Click Opportunities.

  3. Edit an opportunity by clicking on the hyperlinked name in the list.

  4. In the Products table, click the edit icon in the Schedule column. The Manage Schedule page appears.

  5. In the Manage Schedule page, perform, as needed, the actions in the following table.

    Action Details

    Edit schedule transactions

    • To add a row to the transactions table, click the Add button and enter the required information.

    • To remove a row in the transactions table, click the X in the row.

    Replace a schedule

    • Click the Replace Schedule button.

    • The Replace Schedule page behaves as if you are creating a new schedule.

    • Enter the new schedule details and save. The new schedule replaces the old schedule.

    Extend a schedule

    • Click the Extend Schedule button to retrieve the Extend Schedule page.

    • Edit the schedule details as needed.

    • Note the following behavior:

      • If the previous schedule had the number of occurrences stored, then that value is set as the default.

      • The recurring quantity and recurring amount are set by default, based on previous values. If you update these to any other values, the resulting transactions are generated based on the updated values.

      • If the start date of the new schedule is prior to the end of current schedule then the system will replace all existing transactions with a close date later than the new schedule's start date.

    Delete a schedule

    • Click the Delete Schedule button.

    • Respond with Yes to the warning message.

    • All underlying scheduled transactions are deleted, and the schedule parameters on the parent line are removed.

    • The product line is converted to a standard revenue line and the quantity and amount field are set to blank.

  6. Save your work.

    Important

    You must click Save (or Save and Close) in the edit opportunity page to commit the changes made in the recurring schedules page.

How can I lock in a sales credit recipient?

When assigning sales credits, you can lock the sales credit recipients of a revenue line by setting the corresponding Lock Owner checkbox on the line. This setting prevents the recipient from automatic replacement when assignment is run.

Generally, you don't need to lock resources who are members of a forecast territory on the sales credit. However, you should consider locking ad hoc or non-territory-based recipients, such as partner resources, to prevent automatic assignment from removing them as credit recipients.