13Opportunity Products and Revenue

This chapter contains the following:

You typically add product groups or products to opportunities to record potential sales revenue while working the deal. After an opportunity is won and closed, the revenue from the products sold becomes actual revenue, for reporting purposes. Companies use opportunity revenue information for several reasons, such as analyzing sales pipelines and win/loss trends, monitoring the performance of salespeople, and generating revenue forecasts.

Here are some typical tasks that you can perform with opportunity products and revenue:

  • Add products and product groups that the customer is interested in.

  • Set product line revenue attributes, such as revenue amount, price, and quantity.

  • Set other product line attributes, such as inclusion in the forecast, expected close date, win probability, and competitors.

  • Enter and maintain recurring revenue schedules, such as those for subscription services or training plans.

  • Allocate and manage sales credit amounts that opportunity team members receive.

  • Run the assignment process to assign salespeople to the product lines.

Opportunity Products and Revenue Management

You can add products or product groups to opportunities and then update the product lines, including revenue attributes, if required.

Add Products or Product Groups

Here's how to add a 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 Sales > Opportunities.

    The opportunity landing page displays your opportunities.

  3. Find an opportunity and edit it. Or, create an opportunity and save and edit it.

  4. In the Products region, click Add to add a row to the table.

  5. In the Type field, select Group if you're adding a product group. Select Product if you're 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 isn't 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 may be automatically filtered to show only the products in your sales territories.

    For type Product, you can search for the product you want by entering a keyword, name, or product number. For type Group, you can search by name and reference number, if known.

    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 table, where you can set other attributes of the product line, such as quantity, price, and so forth.

  9. Save your work.

This table explains the product line attributes.

Product Field Description

Type

Select either product group or product.

Name

Use to select a product or product group. If individual products aren't 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

Amount used in forecasting and for reporting. The application calculated this field from price multiplied by quantity, but you can override the value.

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 credits to specify who gets revenue and overlay sales credit for the sale.

Depending upon how your application is configured, you may have these additional product line attributes available.

Product Field Description

Close Date

Indicates the expected close date of the product line. The initial value is the opportunity-level close date, but each line can have its own close date.

Forecast

Displays a check mark if the product line matches the established forecast criteria.

UOM (Unit of Measure)

The initial value is based on the product or product group selected.

Status

Use to set the product 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 product lines. You can drill down into the field to view all of the associated territories.

Competitor

You can set a competitor at product-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 product line to closed.

Win/Loss Reason

When a product line or the opportunity is closed, this field indicates why the product line was won or lost.

Actual Close Date

This is a read-only field set by the application automatically when you set a product line to a closed status.

For procedures on managing recurring opportunity products or product groups that are part of a subscription business model, see the topic, Create and Maintain Recurring Opportunity Products.

Remove Product Lines

Here's how to remove any products you don't need from the Products table in opportunities.

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

  2. Navigate to Sales > Opportunities.

  3. Find an opportunity and edit it. Or, create an opportunity and save and edit it.

  4. In the Products region, click the X icon located at the end of the applicable table row to remove a product line from your opportunity.

  5. Save your work.

Can I update products on multiple opportunity lines at the same time?

Yes, if you have the mass update feature enabled at either the opportunity summary or product tab level, then you can update attributes and apply changes to fields at once on multiple opportunity product lines.

Mass update of attributes at the product line level works similar to the mass update of top-level objects such as opportunities and accounts. The main difference is that your opportunity revenue and product line changes are saved at the product line level. Mass update of changes at the opportunity object level are saved at the parent opportunity level.

Recurring Opportunity Products

Recurring schedules in opportunities enables you to 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 you define a schedule for a subscription product or service, the application 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, and so on. The multiple frequencies make it easy to set up a recurring schedule, like a monthly subscription for three years, or a biweekly annual subscription. You can review the 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, you can quickly define a new schedule to replace the previous one. If the original subscription is extended, say, for another year, you can easily extend the existing schedule on the product for the period that you want.

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 you and sales managers.

You use recurring transactions to 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 only if your administrator has enabled it.

Create a Recurring Revenue Schedule

Here's how to create a recurring revenue schedule for a product or product group in the opportunities UI.

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

  2. Navigate to Sales > Opportunities.

    The opportunity landing page displays your opportunities.

  3. Edit an opportunity by clicking the name in the list. Or, create an opportunity and save and edit it.

  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 this 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.

    Note: The number of transactions to include in your recurring revenue schedule for a product or product group should not exceed 500.

    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 actions:

    • 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, product, currency, and so on) 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 if required.

    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.

Manage Scheduled Transactions

All 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.

Here's how to manage existing scheduled transactions.

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

  2. Navigate to Sales > Opportunities.

    The opportunity landing page displays your opportunities.

  3. Edit an opportunity by clicking the 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, if required, the actions in this 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're 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 actions:

      • 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 process replaces 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. Click Save or Save and Close in the edit opportunity page to commit the changes made in the recurring schedules page

Sales Credits

Companies use sales credits to report on the performance and quota attainment of their sales personnel. They also use sales credits 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 to sales resources (salespeople or other sales users) while editing product lines in opportunities. When a product line is first added to an opportunity, the application sets the user who added it, as the sole sales credit recipient. This means that the sole recipient receives 100 percent of the sales credit.

Two types of sales credit exist for opportunities:

  • Revenue sales credit: Typically allocated to salespeople working the deal.

  • Overlay sales credit: Typically allocated to other resources helping out with the deal, such as a product or market specialist. Overlay sales credit is also known as nonrevenue sales credit.

Revenue Sales Credit

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 product line with Revenue or Revenue and Nonrevenue Forecast Participation.

Overlay Sales Credit

When assigning overlay sales credits, keep in mind:

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

  • Nonrevenue sales credits doesn't have 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 product line amount changes.

  • If the selected Allocation Style is Ad Hoc Amounts the sales credit amounts don't change with product line amount changes.

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

Note: Territories with a Forecast Participation of Nonforecast aren't eligible to be set as the forecast territory on either revenue or nonrevenue sales credits.

Configure Default Assignment

You can configure the revenue territory assignment default logic to meet your specific business needs for reporting and forecasting the product amounts on an opportunity. See the article, Configuring Credit Recipients and Forecast Territories Assignment (Doc. ID 2089301.1), available on My Oracle Support (support.oracle.com).

Manual Territory Assignment by Administrators

In the sales credits screens, sales administrators can manually assign a sales representative's territory to a product line when the territory hasn't been assigned automatically. Manual assignment allows sales personnel to forecast an opportunity immediately while the territory setup is being reviewed and updated.

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

When a product line is first added to an opportunity, the user who added it, is automatically set as the sole revenue sales credit recipient (receiving 100 percent of the sales credit). For each product line, you can assign a portion or all of the sales credit from the product revenue to individual salespeople.

Note: You must have Full access to an opportunity to assign sales credits.

Allocate Revenue Sales Credit

You typically allocate revenue sales credit to salespeople working the deal.

Here's how to allocate revenue sales credit to a user.

  1. Sign in as a salesperson or sales manager and navigate to Sales > Opportunities.

    The opportunity landing page displays the list of your opportunities.

  2. Find an opportunity and edit it. Or, create, save, and edit an opportunity and then add a product line to it.

  3. In the Edit Opportunity page Products table, click the edit icon in the Sales Credit column for the line you're editing. The Edit Sales Credit window appears.

  4. Click the Add Revenue Credit button to add another row to the sales credits table.

  5. Select the drop-down list in the Name column for the new row. Select a name from the recently used list, or click Search to search for the salesperson.

    1. If searching, in the Select: Owner page, enter the search criteria for the user you want to allocate sales credit.

    2. In the search results, select the user and click OK.

  6. In the table, enter the percent of sales credit for the user or an amount. With revenue sales credit, the total of all percentages entered must add up to 100 percent.

  7. Optionally, in the Forecast Territory column, pick a territory to forecast the revenue in. The Forecast Territory can be set to any territory assigned to the product line with Revenue or Revenue and Nonrevenue Forecast Participation. The forecast territory is set automatically when the assignment process runs, so you can skip this step if you want.

  8. When you're finished setting the sales credit, click OK.

  9. In the Edit Opportunity page, save your changes.

Allocate Overlay Sales Credit

You typically allocate overlay sales credit, or nonrevenue credit, to other resources helping out with the deal, such as a product or market specialist.

Here's how to allocate overlay sales credit to a user.

  1. Sign in as a salesperson and navigate to Sales > Opportunities.

    The opportunity landing page displays the list of your opportunities.

  2. Find an opportunity and edit it. Or, create, save, and edit an opportunity and then add a product line to it.

  3. In the Edit Opportunity page Products table, click the edit icon in the Sales Credit column for the line you're editing.

    The Edit Sales Credit window appears.

  4. Decide which type of overlay credit you want to enter and then select that type from the Allocation Style list of values:

    • Proportional to Revenue: With this type, the sales credit amounts adjust automatically and proportionally when the revenue item amount changes.

    • Ad Hoc Amounts: With this type, the sales credit amounts don't change with revenue item amount changes.

  5. Click the Add Overlay Credit button to add another row to the sales credits table.

  6. Select the drop-down list in the Name column for the new row. Select a name from the recently used list, or click Search to search for the salesperson.

    1. If searching, in the Select: Owner page, enter the search criteria for the user you want to allocate sales credit.

    2. In the search results, select the user and click OK.

  7. In the Edit Sales Credit window, in the Sales Credit column of the table, enter the percent of sales credit for the user. With overlay sales credit, the total of all percentages doesn't have to add up to 100 percent.

  8. Optionally, in the Forecast Territory column, pick a territory to forecast the revenue in. The Forecast Territory can be set to any territory assigned to the product line with Revenue or Revenue and Nonrevenue Forecast Participation. The forecast territory is set automatically when the assignment process runs, so you can skip this step if you want to.

  9. When you're finished setting the sales credit, click OK.

  10. In the Edit Opportunity page, save your changes.

When assigning sales credits, you can lock the sales credit recipients of a revenue line by setting the corresponding Lock Credit Owner check box 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 resources or non-territory-based recipients, such as partner resources, to prevent automatic assignment from removing them as credit recipients.

Product Attribute Synchronization

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

Scenario

This example illustrates what happens when you change the opportunity win probability:

  • Opportunity win probability is 50%.

  • Product line 1 win probability is 50%.

  • Product line 2 win probability is 50%.

  • Product line 3 win probability is 40% .

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

The win probability for product line 3 doesn't change, because it wasn't previously in sync with the opportunity-level win probability.

Opportunities and their product lines share common attributes, for example, status or win probability percentage. For several attributes, under certain conditions, the application automatically synchronizes them so that they're the same. In addition, the application updates certain opportunity and product line 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 synchronized if its opportunity and product line values are the same, and if the product line is in the same status category as its opportunity. If a product line and its opportunity both have undefined values, they're considered to have the same value.

Synchronization of Opportunity and Product Line Attribute

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

Synchronization occurs for these attributes:

  • Win probability

  • Close date

  • Include in forecast setting

  • Status (not status category)

Here is an example of close date synchronization:

  • An opportunity with an Open status category has a close date of July 14, 2018.

  • Product lines 1, 2, and 3 have the same close date and they're in the same status category.

  • Product line 4 has a different close date, but the same status category.

  • The close date of the opportunity is changed to August 14, 2018. The application automatically sets the close dates of product lines 1, 2, and 3 to the same close date as that of the opportunity. The close date of product line 4 remains unchanged, because it has close date that wasn't already synchronized with the date of the opportunity.

Opportunity Status Updates

These scenarios explain what happens when the 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 synchronized product 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 doesn't update the close date on synchronized product 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 product line competitor to the opportunity primary competitor for all opportunity product lines, if they aren't already defined. This action 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 doesn't update the win/loss reason on synchronized product lines.

Product Line Status Updates

These scenarios explain what happens when the product line status is updated:

  • Product line status is updated to a Won status: The application sets the product line win probability to 100 percent.

  • Product line status is updated to a Lost or No Sale status: The application sets the product line close date to the current date.

  • Product line status is updated to a Closed status: The application enables the product line win/loss reason attribute.

  • Product line status is updated to an Open status:

    • The application disables the product line win/loss reason attribute.

    • The application updates the product line 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 product lines where the win/loss reason attribute is synchronized.

Note: If the opportunity line item status is set to inactive, then Reason field is editable in the List view so that you can include a reason why the line item isn't active. However, the Reason field isn't editable on the Form view of the Opportunity Line Item. This is expected behavior due to the difference in the page structure. The edit page from the List view has a table view for Revenues, while the Form page has a form view and is therefore not editable.

Opportunity and Product Line 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 product line competitor to the primary competitor for all lines that don't already have a competitor.

Tip: If a product line without a competitor is set to closed and the opportunity is saved, the application displays a dialog box that lets you copy the opportunity primary competitor to the product lines without competitors.

This action applies only to edit opportunity and close opportunity flows. It doesn't apply to the mass update flow.