The settings accessible through the Revenue Module have been described in detail in this article, but sometimes the best way to understand the rule is to look at a specific case.
Example: Strict settings on Push Edge Cases, Sensitivity (days), and License End Date
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, Planhat will in most cases display recurring revenue in the consecutive month:
License A: January 1 2021 - January 1 2022
License B: January 1 2022 - January 1 2023
However, if there is an overlap in dates, and you have a number of “strict” settings, then you may observe some unwanted characteristics in the Revenue Module charts.
For example, if you:
set Push Edge Cases to backward,
set License End Date to always include,
set Sensitivity (days) to 0,
Then Planhat will display both Licenses in your Revenue Base for the month of December 2021:
(If you set Base Is to Value up for renewal in the Renewal Rate tab, the upgrade is not shown, this is because Planhat does not consider any License Up for Renewal when License B starts in this scenario, but more on that under the Base Is section in the Revenue Module Settings article)
The reason for the observed upgrade and subsequent churn, is that pushing edge cases backward rather than forward ensures that License B, starting 1 Jan 2022, must be shown to start in December 2021. Sensitivity (days) would override this setting, “soft-pushing”, or “compressing”, the second License to January, but if this is set to 0, it will not. Finally, setting License End Date to “always include”, ensures that Planhat will display both Licenses in the overlapping month of December (pushed back from January), in cases of overlap.
In short, the combination of pushing backward, sensitivity: 0, and always include end date, results in overlapping revenue for Licenses where the dates overlap, even if it’s a matter of one day.
Ways to change this:
Setting Push Edge Cases forward:
Here, pushing edge cases forward ensures that License A is displayed from January 2021, and that License B is displayed from January 2022. Please note however, that while Push Edge Cases forward happens to represent revenue in a (probably) more accurate way in this scenario, this setting should be used in a principled way - you have to decide on one or the other for all of your Licenses in the Revenue Module. If you want to display certain concurrent or separate Licenses as continuous, the best way to address this is through adjusting the Sensitivity settings.
Setting Sensitivity (days) ≥ # of overlapping days:
Here, the sensitivity setting allows Planhat to “soft-push” License B into the following month, overriding the Push Edge Cases backward setting, while maintaining the setting to push License A back a month. This is the most efficient and precise way of adjusting settings to accommodate overlaps and gaps in revenue. What threshold number do you want to apply? If you want 5 day overlaps or gaps to be “smoothed out”, but any discrepancy greater than that to be represented in the exact month applicable, then you would set Sensitivity (days) to 5.
setting License End Date to “never include” or “best guess”:
Here, Planhat is set to treat license end dates in the way that makes the most sense. So in this example, the end date of License A will not be included to cause overlap. Please note, however, that if the overlap exceeds 1 day, setting License End Date will not correct any misrepresentation, this is best done by increasing Sensitivity (days) to allow overlaps of several days to be smoothed out by Planhat.