If you're an organization that bills customers on a monthly basis, then you need to analyze your revenue differently from those who only collect one-time payments. You need visibility into what's predicted each month, what churn you see and how your products/services are being billed.
For HubSpot customers, you can do all that and more...with the right metrics tracking set up.
Want to gain better financial insights and improve revenue forecasting in HubSpot? Then you need to set up your Monthly Recurring Revenue (MRR) and reporting.
What is Monthly Recurring Revenue (MRR)?
In HubSpot's tracking, Monthly Recurring Revenue is the total predicted revenue generated each month from a specific deal. If you send a segment of your clients a monthly bill, then you should be tracking Monthly Recurring Revenue.
Monthly Recurring Revenue (MRR) vs. Monthly Revenue
It's important to know the difference between MRR and Monthly Revenue. MRR only measures anticipated revenue from a subscription. This is limited to one deal at a time. Monthly Revenue is the measure of all revenue collected within a given month. This is a more holistic look at revenue coming in.
If your business offers services that are charged monthly and services that are a one-time cost, then you'll want to track both MRR and Monthly Revenue. If your business does not offer subscription-style billing, then you'll only want to track Monthly Revenue.
Tutorial: How to Report on Revenue in HubSpot
Monthly Recurring Revenue (MRR) vs. Annual Recurring Revenue (ARR)
It's also important to know the difference between MRR and ARR. MRR and ARR measure the same metric (the revenue from a specific deal) but over different periods. MRR is monthly, while ARR is typically quarterly or yearly.
How to Track Monthly Recurring Revenue in HubSpot
Now that I've gone through the basics, let's get onto the main show: how to set up your MRR in HubSpot. In HubSpot, MRR is based entirely on the product library.
The product library is a core HubSpot functionality that allows you to associate products to deals, quotes and invoices. For MRR tracking, this is how the system knows what revenue is from a one-time deal and what revenue is from a repeat service.
Note: If you offer subscription-based billing for your products or services, I STRONGLY recommend that you follow the steps below to set up MRR before you import existing deals into HubSpot. It will save you a lot of headaches down the road. If you have already imported your customers, you will need to go back and associate them with their monthly services after the fact.
1. Creating Products/Services
"Products" in this case refers to the specific items that you'll be charging each month. This can be a physical object or software, but for many B2B brands, your "products" will be your services that are billed monthly.
To create a Product:
- Navigate to Commerce > Products (note - the "Commerce" section is the wallet icon in the lefthand menu)
- In the upper right corner, click on Create Product. You can also click on Import products if you have a spreadsheet and would prefer to bulk import. For most B2B organizations, I would recommend entering each product manually vs. importing. However, if you are a retailer with a large inventory of products, a bulk upload is easier.
- You'll be asked to enter details about your product. Most of the time, the default properties are sufficient, but you can also create custom properties for products in HubSpot. You'll see options for product name, description, type, price, billing frequency and more. Not every line item has to be filled out - so only fill out what's relevant to your product (ex. - If it's a service and doesn't have a SKU, skip that line. If you only accept one currency, you don't need to set prices per currency.)
- Remember to click Save or Save and add another to make your updates stick.
You can always return to Commerce > Products to edit your individual products if any details change.
2. Associating Products/Services to Deals to Track MRR
After setting up your Products/Services, you need to ensure they are associated with your deals. There are a few different ways to associate Products with specific deals:
- When adding a line item to a deal (excludes custom line items).
- Toggling the Create a new deal for each payment switch on for payment links.
- When creating a quote.
- Using custom coded workflow actions.
- Using the associations API.
- Via an integration.
If you're just getting your HubSpot account set up and don't have all of your deals imported, adding a line item to future deals is the most effective.
If your HubSpot account already had all of your deal and customer information imported before you've set up MRR, please contact our HubSpot experts for help. You can still retroactively associate products to deals, but it will take a while to do it manually - we have some tricks we can show you, depending on your HubSpot plan.
2.5. How to Set Up Subscriptions on HubSpot
I'm including this as a 2.5 because it's not necessary for all use cases, but if you want to collect payments online AND/OR want to track the status of invoices, then you should also set up Subscriptions. This makes it easier for both you and your clients to ensure their monthly fees are paid.
In HubSpot, you can set up Subscriptions in one of two ways: recurring payments (which are self-serve - can be manually paid each month or the client can set up auto-billing) or recurring billing (which are printed invoices sent each month - payments can be collected separately).
To set up Subscriptions in HubSpot, follow this tutorial: Manage Recurring Billing and Payments With Subscriptions.
Setting up MRR Reporting in HubSpot
Now that I've gone through the basics and setup, let's get onto something more exciting: how to report on your MRR each month. By default, you can track specific MRR for specific deals and create reports for that customer. However, you may also want to have a broader view, which brings us to...
Next Steps: Track Recurring Revenue in HubSpot
I've covered how to track your Monthly Recurring Revenue for a specific deal. But let's say you want to take a step back and look at multiple deals at once. What if you want to know how much money all of your subscriptions generated in X month? What if you want your sales team to be able to see the anticipated monthly value from a lead?
To do so, you'll need to set up recurring revenue tracking. In HubSpot, this is different from the MRR property. To do so, you'll need to follow this tutorial from HubSpot: Tracking Recurring Revenue.
After you've completed those steps, you'll gain access to additional reporting options that can help support your MRR tracking.
Recommended Reports
Ok, now you're finally done with setup. Now you can start saving reports. I recommend setting up a dashboard to track any revenue metrics you want to keep an eye on. You may also want to add some of these reports to existing sales, marketing or customer service dashboards so those teams can track predictive revenue, original source for deals and churn rate.
If you've never explored reports in HubSpot, check out our guide: 15 Pre-Built Reports to Add to Your HubSpot Dashboard
Pre-built HubSpot reports to track MRR:
- New Subscriptions MRR - How much MRR you generated in a given month.
- Churn Subscriptions MRR - How much monthly recurring revenue you lose to churn.
Other Pre-built HubSpot reports to track revenue:
- New Subscriptions ARR - How much ARR you generated over a quarter or year.
- Churn Subscriptions ARR - How much monthly recurring revenue you lose to churn, over a quarter or year.
- Gross Payment Revenue From Top Selling Products With Recurring Payments - Your top 10 products that had recurring payments this year.
- Gross Payment Revenue by Current Month - Total revenue collected from both one-time and recurring payments.
- Target Accounts by Annual Revenue - See which target accounts have the highest potential annual revenue.
- Closed Revenue By Month With Deal Total And Closed Revenue Breakdown - View the total revenue collected in each month over the year. You can use filters to only track recurring revenue.
Related Content: Key Metrics to Track After Your HubSpot Implementation
Setting up Monthly Recurring Revenue will improve your ability to forecast predictable revenue, as well as track your existing monthly recurring deals. For B2B services, SaaS companies and eCommerce retailers, this unlocks better insights into your ROI. It may seem like a lot of setup work, but trust me...the results are well worth the effort.
HubSpot CRM Implementation, Onboarding, CMS Design and Marketing
Better Leads + Engaging Content + Better Systems = Better Conversions.
That’s Scalable Growth.
But you can’t scale across a thousand scattered post-it notes, Excel files, and disorganized systems. You need one powerhouse system for all your teams.
You need HubSpot.
As a Platinum HubSpot partner, we provide onboarding, implementation, service, HubSpot web design, marketing and automation for the most powerful sales and marketing tool available.
Learn more about our HubSpot CRM Implementation services here.
BizzyWeb is a Minneapolis-based digital marketing and web design agency that helps companies get the high-quality leads they need to grow and thrive. Our tactics include inbound marketing, SEO, advertising, web design, content creation and sales automation. We are an accredited HubSpot Platinum Partner and we offer full-service HubSpot onboarding, enablement and strategy for new and current users.
