The Revenue Module is designed to provide an intuitive and precise overview of your recurring revenue. In order to do this, there is a high degree of adaptability, most notably through the settings section in the Recurring Base, Renewal Rate, and Bookings tabs. These settings allow you to set rules for License start and end dates, overlapping or “gapping” Licenses, as well as how and whether to include forecasts and opportunities. You can also make adjustments, in the Renewal Rate tab, to the base used to track revenue development.

The Revenue Module is split into 5 tabs: Recurring Base, Renewal Rate, Bookings, Renewals, Invoices. In-module settings are available for the first three. Recurring Base shows past, current, and future (forecast) recurring revenue by month. The Renewal Rate tab can show a similar view, but visibly categorises churn, downgrades, renewals, and upgrades. Bookings shows the entire value of deals in the month of close. Values are displayed either as MRR or ARR depending on your preference in General Settings.

There are 7 settings available directly in the Recurring Base tab under the Revenue Module, 6 in the Bookings tab, and 9 in the Renewal Rate tab:

Settings available in all 3 tabs*:

Additional Settings in Renewal Rate tab:

This is a setting allowing you to decide how to handle Licenses that start at the first day of the month.

📌 Please note that a license starting on the last day of the month will always display monthly revenue in the Revenue Module and Customer Profile, for that month.

For example, you sign a one-year, fixed-term License, “License A”, which is renewed as License B.

You may want to display License A as a new sale in December, and as a renewal in January (i.e., if the customer is still subscribed at end of January, you want to display this as retained revenue in January). If so, you can set Push Edge Cases: backward.

Under Recurring Base, You will see bars for each month of License A, starting either in December 2021 until and including the month of November 2022 (Push Edge Cases backward) or starting in January 2022, extending to include December 2022 (Push Edge Cases forward).

Under the Renewal Rate tab, depending on your setting for “Base Is”, you will see:

Under Bookings, you will either see the Booking represented in the month of December 2021 (backward) or in January 2022 (forward).

When the License dates clearly span whole months, and there are no overlaps or gaps, the Push Edge Cases setting is fairly straight forward. But let’s look at an example with a gap between the Licenses:

If you signed a customer on June 15 2021, and the License has a Fixed Term of one year, set to end on June 14 2022, this License will be displayed from June 2021 regardless of edge case setting. However, if this License is not renewed until July 1 2022, Push Edge Cases will impact how the revenue is displayed over time. If you choose to Push Edge Cases forward, then Planhat will display recurring revenue for License B starting from July. There will be a gap:

License A is not an Edge Case, but License B is, since it starts on the first of the month. If instead you set Push Edge Cases backward, License B will be pushed back to June 2022:

The same is reflected in the Renewal Rate tab. With Push Edge Cases forward, License A is assumed to begin as “new biz” in June 2021, and is up for renewal in June 2022. However, the renewal of the License on July 1 is considered as starting in July because it has not been pushed back. Therefore, churn is displayed in June, new biz is considered in July, and License B starts to show as retained in August 2022.

With Push Edge Cases backward, License B is considered as starting in June 2022, the month of License A’s expiration. Therefore no churn is displayed.

This example serves to show both how Push Edge Case works, and how (possibly unwanted) gaps and spikes are displayed. While adjusting settings for Push Edge Case can sometimes have the desired effect on the representation of renewed licenses, it can in other scenarios have an adverse effect. A more precise adjustment, if you wish to address spikes and gaps, would be to set Sensitivity (days) to match or exceed the number of days between the end of License A and the start of License B. This would “stretch” License A to include the month of June 2022 in the chart.

Push Edge Cases is a setting primarily addressing whether first-of-month Licenses should be displayed in the current month, or the previous. Sensitivity will be discussed at greater depth under the corresponding header.

This setting interacts with settings under the Revenue tab in the Customer Profile, where you can set auto-renewal (”yes” or “no”). The first three settings: Assume Churn, Assume Renewal, and Churn only if Auto-no, will respect your Manual Forecast settings, discussed in the section below. The fourth setting will not.

• Ignore manual forecasts • Use best guess • Use Optimistic • Use Pessimistic

This setting interacts with the manual forecasts in the the Customer Profile, where you can set a best guess, optimistic, or pessimistic renewal revenue forecast. Manual Forecasts always override the Auto Forecast settings described in the previous section, unless the setting: Churn only if Auto-no (ignore manual) is chosen.

This setting determines if Opportunities should be shown as forecasted revenue.

This setting is interesting, because it gives you flexibility to decide how Planhat should interpret your License end dates when you have concurrent licenses. For example, your company may use annual contracts setting the start and end dates to the same date, one year in between - e.g. January 1 2021 - January 1 2022. If you renewed this license on January 1 2022, the end date of the previous license, then this setting can impact how your revenue is displayed. For example, if you have particular settings for Sensitivity (days) = 0, and Push Edge Cases = backward, then setting License End Date will have a lot of impact.

In this example, Licenses would overlap by one day:

However, if you have set License End Date to “best guess”, or “never include”, the first license will not extend to include January 2022. For a more detailed explanation of how Push Edge Cases, Sensitivity (days), and License End Date interact, please see this Case Study article.

This setting allows you to establish how many days Licenses can overlap, or be separate, for Planhat to display revenue continuously, rather than with spikes or gaps.

The differences between Sensitivity (or “churn tolerance”), and Pushing Edge Cases, are 1) that pushing edge cases affects only first-of-month contracts, 2) that pushing edge cases, as a rule, shifts the time-span of the License’s recurring revenue, whereas Sensitivity stretches License A to bridge a gap, and “soft-pushes”, or compresses License B to smooth a spike. Pushing Edge Cases can have an impact on how gaps and spikes manifest in the chart, but it is the Sensitivity setting that specifically targets this.

Another scenario in which Sensitivity settings play a role, regards gaps. For example, if License A runs from June 1 2021 - May 31 2022, and is renewed as License B from 14 July 2022 - 13 July 2023, Planhat will display a gap of at least a month, unless you have set Sensitivity (days) to accommodate this gap:

If, however, you set Sensitivity (days) to accommodate the gap, License A will be stretched until the start of License B, regardless of the Push Edge Case setting:

This setting allows you to determine if Sensitivity should be applied to late renewals (i.e. renewals starting several days after the previous License end date), early renewals, or both.

This setting determines the base used to calculate Renewal Rate, Gross Churn, and Customer Churn in the Gauges. The gauge for Renewal Rate will show (1+(upgrades - downgrades - churn)/base). Gross churn shows (churn + downgrades)/base. Customer churn shows (lost customers / number in base).

If you use “Total base beginning of period” and look at a month, the developments to existing contracts during that month will be compared to all contracts that are running at the beginning of the month, including fixed term Licenses not set to renew until subsequent months. However, taking as a base the “Value up for renewal”, any fixed term Licenses running through the month, not scheduled to renew, are not included in the base.

For example, if you have 3 customers each paying 10K per month, of which one churns, another renews, and a third is not set to renew until next month, the gauges will display the following results in the different settings:

An interesting example showcasing the difference between using total base beginning of month and value up for renewal, can be found below:

If License A runs from July 8 2021 - August 7 2022, and License B runs from July 2 2022 - July 1 2023, there is a 36 day overlap. If the Sensitivity (days) setting does not accommodate this overlap, a spike will be shown in the Recurring Base. The implications for the renewal and churn gauges in the Renewal Rate tab depend on the Base Is setting:

When the base is set to use the total for beginning of month, License B will be regarded as an upgrade, increasing revenue retention by 100%. However, when License A expires in the following month, 50% gross churn (and renewal rate) is observed, as the base is interpreted as decreasing.

However, the results differ when you have set the base to “value up for renewal”:

When the base is instead set to use the value up for renewal, License B will still be regarded as an upgrade, but this will not show, as License A is not considered as up for renewal in July, the first month of License B. In August, License A is represented as churned, like in the previous example. The difference here, is that only License A, not License B, is up for renewal in August, so the entire considered base is represented as churned. This translates to 100% gross churn, and a 0% renewal rate.

When this is set to “yes”, and the companies included in a group structure, are also included in the filtering of the Renewal Rate tab in the Revenue Module, Net Retention metrics will refer to the group as a whole. In other words, if one company ina group structure of 5 is churned, this setting will show this churn as a downgrade, because all companies included in the group structure (and included in filtering) are considered as one.

MRR on the Company Profile

The MRR field on the Company Profile refers to the MRR (USD), or other currency, field on the Company level.

Recurring Base System Metric

The Recurring Base system metric available in the Customer Intelligence Module> Trends and Analytics> Revenue> Recurring Base, refers to the same data as the MRR field.

The Recurring Base system metric shows Time Series Data. As such, it shows the actual value that total MRR has taken through time. If you change licenses retroactively, that ended in the past, this will not reflect in the Recurring Base Metric, because the metric looks at the value of revenue as logged at the time.

Set (guess) License Status - General Settings

This setting allows Planhat to “guess” the status of Licenses, looking at whether a new License has started after the completion of the first License. If you set this to 30 days, Planhat will assume the first License was renewed if a second License started within 30 days of the first License ending.
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In the above example, if a second License has not been created to start before 30 days have passed from the first License ending, the first License will be set to Lost. Further, if on e.g. day 35 after the first License ending, a second License is created with a historical start date before the 30 days had passed, e.g. day 27, Set (Guess) License Status will not update the status of the first License. This is specifically the case for Licenses that have the status set to Lost.

Please note that this is updated once per 24 hours. This setting is different from Sensitivity (days) in that Sensitivity dictates how to display Licenses with gaps and overlaps in coverage, whereas Set (guess) License Status actually sets the status of Licenses. If you want to adjust how churn is displayed in the Revenue Module, Sensitivity (days) should be used.

In summary, the settings section in the Revenue Module allows modification of a lot of factors depending on how you run your business and track your revenue data. Perhaps the most important take-away is that there are some decisions you need to make for all Licenses, and there is a benefit to taking a consistent approach when importing, logging and updating your License and customer data. You can choose Push Edge Cases forward (recommended), or backward, as a rule. If you want Sensitivity (recommended) for spikes and gaps in License coverage, then the number of days you choose for your tolerance span will apply to all Licenses, as will the Sensitivity direction.

While changing and experimenting with these settings can give insight, in order for maximum utility and efficiency, you may want to maintain consistent settings, building your processes around how you have decided to track revenue and vice versa.