Can I not model product subscription revenue in Pipedrive?

Brad G · August 2023

Here is the scenario I am working with:

I am using Products to represent software licence seats. These come in different tiers:

Gold-tier licence: $1000 / user / year
Silver-tier licence: $750 / user / year
Bronze-tier licence: $500 / user / year

Our customers typically commit to terms of 3-5 years up front, but the licence is billed annually (i.e. SaaS). So for example, a typical deal could be 250 Gold-tier user licenses for a term of four years, billed annually. This means:

the annual licence fee paid is 250 users x $1000/user= $250,000
the total contract value over the four-year term is $250k x 4 years = $1M

I have defined my Products, and when I add them to a Deal I can set the Duration to 4 years.

Unfortunately in the corresponding Revenue forecast, Pipedrive insists on showing the total contract value as if it is being paid all at once on the closing date (i.e. the annual licence cost x 3-5 years). Why can't I represent this as annual recurring revenue?

The only option that I can see to model the revenue accurately is to use the the "Subscription" and specify that there will be four annual payments of $250k each... but in order to do this and have the Deal value be accurate, I have to delete all of the Products on the Deal. Losing the ability to use the Products feature is a shame because then I lose the ability to build reports of sales by product.

Am I missing something? Or can this scenario simply not be handled by Pipedrive?

Amit Sarda (AmitSarda.xyz) · August 2023

I would suggest considering Coupler or Flatly to build a data pipeline to visualize this in a BI or reporting tool like Tableau or Looker Studio. You can read more about building a data pipeline for Pipedrive in this article.

Brad G · August 2023

Amit - should I take your reply as confirmation that Pipedrive cannot show revenue forecasts properly for products with annual subscriptions?

Gerry S. · August 2023

I am dealing with the exact scenario Brad is dealing with. Any help is much appreciated.

There are two needs for management and investor reporting and for process support (i.e., revenue recognition and invoicing):

Total deal value (TDV) and annual recurring revenue (ARR).

And, apart from these, is a time-based forecast of when the TDV rolls out to the income statement.

These are things the PipeDrive folks need to work on.

inacyakup · August 2023

Hello everyone,

Fully integrated with Pipedrive cumul.io I recommend you to look at its application.

Best Regards

Gerry S. · August 2023

I had a demo with a rep for this product and it was not what we need. He recommended Osmos.io, which is a data intake and management tool. More what we may need. The term "model" data was perhaps the source of confusion. I need, and I think Brad G needs, the ability to pull data from within PipeDrive and transfer it to downstream systems to work with the data to complete processes such as revenue recognition on a multi-year contract or invoicing on a one-time or repeated basis for the same multi-year contract.

alexf · January 2024

It seems that the product duration field is intended for things like hotel bookings – product is a room @ $200, duration is 4 nights, total due $800.

However they do offer Monthly and Yearly for the duration period so I agree with you that it should be possible to summarise only the first year value as the Deal total. Unfortunately I can't see a way to do this either currently.

Another approach might be a feature to (optionally) sync the subscription billing schedule with the product durations... it looks as if Pipedrive is slowly moving in the direction of supporting SaaS licensing but at present it simply doesn't work very well.

Suggestions:

use the subscription billing schedule and forgo products as you note above – not very palatable, but workable
only add a product with the ARR or first year value on it and put the remaining information (contract term, subsequent yearly amounts etc) in the product notes field. On deal close, it becomes a manual sales admin task to process the information in the notes correctly. Or you could add a "contract term" custom field to Deal which can be used (manually) to work out the TCV and billing schedule once the Deal is closed.

Part of the answer to this depends on how you're treating your in-life contracts... what happens after Deal close?

I hope someone from Pipedrive is reviewing these questions as the current capability is sorely lacking for SaaS businesses...