Recurring Revenue - Part 4 - Forecasting MRR and FYV

In the previous post, we added MRR and FYV custom currency fields on the Opportunity object. The next step is to set up forecasting on these fields.

The first requirement is to enable Opportunity Splits. 

If you’re not actually splitting credit among reps, the opportunity owner will receive 100% credit by default, so turning on splits doesn’t require additional input on each opportunity, but IS required to set up forecasting with custom fields.

In Setup, search for Splits, click on Opportunity Splits Settings then on Set Up Opportunity Splits. I’m going to rename the first entry from Revenue to TCV (total contract value) to better distinguish that from our custom fields. I’ll deactivate the Overlay split type.

Next, I’ll add a new split type, naming it MRR and selecting the Opportunity – MRR field. Repeat for FYV, using the Opportunity – FYV field.

Click Save. Check the warning and then, if those warning conditions don’t apply, click Enable.

Now you have the option to add the splits into to various page layouts. If your only use for the splits is forecasting (that is, you’re not really splitting credit), you can leave the splits off the page layouts.

Once you click Save, Salesforce will kick off a process to apply splits to your existing opportunities; depending on the size of your org, this could take a bit of time.

Next we enable these new split types for forecasting. 

In Setup, search for Forecasts then click on Forecasts Settings. The Opportunity Revenue forecast type is the default, fed by the Amount field. 

Click ‘Add another forecast type.’ On the next page, select MRR as the forecast type. Then customize the list of fields to show. I’ve removed the Forecasted Amount and Split, replacing them with MRR. Click OK, then repeat these steps with FYV.

Let's check out the results!

Recall the sample opportunity from the prior post. That had a total contract value (the ‘Amount’) of $3150. Of that, the monthly recurring charges were $125, and the first year value was $1650. I’ve moved that opportunity into the current quarter’s commit. So let’s take a look at the Forecast module.

On the Forecast tab, the Settings drop-down now offers a few more options. Under Forecast Type, I can select FYV, MRR or ‘Opportunity Revenue’ (aka Amount). As you switch among the different forecast types, you’ll see the different amounts rolling up under Commit.

When viewing the FYV forecast, I have $1650 committed; with the MRR forecast type, the commit is $125. These same amounts would also roll into the Closed field for the respective views once the opportunity is closed-won. Note that you can load quotas for the different forecast types as well. Those can be displayed on the forecast tab and used in reporting.

Mission accomplished! Starting with product attributes, we’ve calculated MRR and FYV amounts on the Opportunity object. And now we’re able to roll up forecasts on these amounts.

Next time, we’ll wrap up the series with some tasks and reports to support tracking of billings and recurring revenue.

Salesforce Help & Training Reference: https://help.salesforce.com/articleView?id=forecasts3_understanding_custom_field_forecasts.htm&type=5