How to measure your revenue metrics (ARR, MRR, NDR, etc.) using HubSpot's "Invoice Line Items" (with video)
Introduction
HubSpot has created a great explanation on the use of line items. This tutorial explains the best practice of using line items for SaaS companies, allowing you to easily analyze key business metrics such as MRR, ARR, NDR, etc. using Alta's out-of-the-box metrics.
Once set up line items in HubSpot, you can create advanced metrics and dashboards on Alta, as shown in the example below, as well as use out-of-the-box metrics in order to create widgets and dashboards.
Most startups and small companies track and measure their contracts in Excel, isolated from the CRM. This approach is problematic for revenue analytics and prevents you from staying on top of your revenue numbers. Additionally, it requires a significant amount of manual work, which is time-consuming and prone to errors.
By the end of this guide, you will have line items structured like this for each deal:
Below is a quick video with how to do it in HubSpot.
Step-by-Step Guide
Before starting, we highly recommend adding a new field in HubSpot called 'Subscription End Date'. We created a short how-to guide that explains how to do it. It’s not mandatory, but it's recommended to store all contract data in one place.
Add a Line Item to a Deal
On the right panel of a deal, you have a section for 'Line Items' where you can 'Add an Item'. You’ll have the option to choose from your internal library or create a customized 'Line Item'. In this tutorial, we will create a customized one, so we click 'Create Custom Line Item'.
Creating a Line Item
You need to fill in the line item details. We recommend the following:
Unit Price: The contract value. If you have a monthly subscription of $10,000, the unit price is $10,000.
Billing Frequency: Weekly, monthly, yearly.
Billing Start Date: The contract start date.
Contract End Date: A customized field to store the end date of the contract.
Billing Terms: Usually in SaaS companies, it should be 'Automatically renew until canceled'.
Quantity: Depends on the pricing structure. For SaaS, the most common is filling in 1.
Once you've made these changes in HubSpot, you can go to Alta and use prebuilt out-of-the-box metrics, such as ARR, MRR, NDR and more, as well as to add widgets from our marketplace to your dashboards.
Learn more about best practices for using Alta to track your revenue metrics here
If you need any help with your Alta account setup, don't hesitate to reach out to our team at [email protected]