Each quote line item (QLI) has an associated Net MRR (Monthly Recurring Revenue) impact, calculated as follows:
Net MRR = New MRR - (Lost MRR) + Uptick/Downtick
The elements of this equation are defined as follows:
- New MRR: Revenue associated with new services (always positive).
- Lost MRR: Revenue associated with canceled services (always negative).
- Uptick/Downtick: Difference between new and old values, calculated for compound and Re-Term line items. This value might be either positive (uptick) or negative (downtick).
These numbers are rolled up from individual QLIs as quote totals, and can be used for quote approvals as well as accurate sales funnel reporting.
| Important | Lost values are always stored in Salesforce as negative dollar (or currency) amounts and displayed in the UI as negatives using the accounting notation, e.g. ($1200.00). |
The calculation of new, lost and uptick/downtick depends on the line item type as shown below:
| Line Item Type | New Revenue/Profit | Lost Revenue/Profit | Revenue/Profit Uptick/Downtick |
|---|---|---|---|
| New | MRR of the new service (defined in the price book) / Book margin (defined in the price book) | $0.00 / $0.00 | $0.00 / $0.00 |
| Cancel | $0.00 / $.00 | Current MRR of the service being canceled / Booked profit of a service | $0.00 / $0.00 |
| Replace (compound QLI) | $0.00 | $0.00 | Difference between new service MRR based on the price-book and the current MRR of the service being replaced (canceled) |
| Service Request | NA – service requests only cause non-recurring service charges | N/A | N/A |
| Re-Term | $0.00 | $0.00 | Difference between new MRR and current service MRR |
| Important | Profits are calculated based on price-book costs (a.k.a. booked costs) not real costs. |
| Quotes with product parts If services or widgets in New (or New part of Replace) contain parts, the total revenue (including the parts) is used in calculations. |
