Monday, January 23, 2017

Product Schedule in Salesforce

In Sales Cloud, when companies are dealing with Accounts, Contacts, Opportunities and Products, one thing is very obvious who the company will get the money back from the Contacts for the Products sold to them. Are the contact/account going to pay all together in one shot or are they going to pay over the period of times(Equal Installments)? 

Salesforce has the answer to these questions. In Salesforce you can configure how your customer will pay you the money. Based on that configuration, you can run your business reports to track your sales matrices. The way you can configure this in Salesforce is known as Product Schedule. Product Schedule are the payment or delivery cycles for the products which will be either paid over time or delivered over time. 

In Salesforce we have three different types of schedules. 
  • Quantity Schedule: Choose this schedule when you want your products to be delivered over the period of time. Example - Consider your customer bought subscription of one magazine from you for the next 2 years. Now you need to courier the monthly subscription to your customer every month. So in this scenario, you will go for Quantity Schedule.
  • Revenue Schedule: Choose this schedule when you want your customer to be billed over the period of time. Example - Consider you are selling House Insurance to your customer. The total cost is USD 1200 for one year. But you will bill customer on monthly basis i.e. USD 100 per month. In this scenario, you will go for Revenue Schedule.
  • Revenue and Quantity Schedule: Choose this schedule when a product will be delivered over the period of time and you bill your customer also over the time. Example - Consider your customer bought the subscription of one magazine for next 2 years. But this time instead of charging your customer at the beginning, you will charge the customer on monthly basis and also courier the magazine on monthly basis. In this scenario, you will go for Revenue and Quantity Schedule.
Schedule Type:
Schedule Type defines how the Number of Installments is used. There are two types of Schedule Type 
  • Divide: Here the Unit Price is divided by the number of installments.
  • Repeat: Here the Unit Price is multiplied by the number of installments.
Product Schedule can be enabled from Setup > Customize > Products > Product Schedules Settings.

Note - Read this post from Salesforce on Consideration for using Product Schedules.

Default Schedule:
A default schedule is associated with a product for a particular price book. Every time such product is added to the Opportunity, the default schedule is automatically added as well. Even though default schedule is automatically added to the Opportunity, Sales Rep can still change the schedule. 

Let's go for some Use Cases.

Use Case # 1
Company ABCD is selling subscription of their magazine - "Let's Enjoy". This magazine is getting published on monthly basis and cost of each publication is USD 10.00. Company ABCD is having customer who is planning to buy the subscription for next 2 years. Sales Rep of ABCD will now create the opportunity, add the product and product schedule as well.

Implementation:
Assumption: Product "Let's Enjoy" is having no default schedule setup.
Product is configured as shown below -
Now create the opportunity and add the product to the opportunity as shown below -

Let's configure the Product Schedule now as shown below in the below pictures -

So now Quantity Schedule is configured in Salesforce.

Use Case # 2
Company MNOP is selling "House Insurance". Cost of House Insurance is USD 1200 per year. Company wants to bill customer for this insurance on monthly basis. Sales Rep of MNOP will now create the opportunity, add the product and product schedule as well.

Implementation:
Product is configured as shown below -
Now create the opportunity and add the product to the opportunity as shown below -

Let's configure the Product Schedule now as shown below in the below pictures -
So now Revenue Schedule is configured and the total amount i.e. USD 1200 is divided into 12 equal monthly payments i.e. USD 100.00.

Note - If a product is having both default Quantity and Revenue Schedule, then Quantity Schedule is calculated first to determine the total product revenue. Then the Revenue Schedule is applied to the amount. I will explain this in my next Use Case.

Use Case # 3
Company IJKL is selling Medicine Box (Cost is USD 10.00 per box) to hospital BCD. The quantity of Medicine Box is 1000. Company will deliver the boxes over the period of 12 months on monthly basis. Company will send the bill to hospital quarterly over the period of 6 installments. Sales Rep of IJKL will now create the opportunity, add the product and product schedule as well.

Implementation:
Product is configured as shown below -


Now create the opportunity and add the product to the opportunity as shown below -

Default Schedule will be applied and it will be displayed as -

As the above picture says, the quantity is distributed on monthly basis where the revenue is distributed on quarterly basis.

I hope with the above examples, the concept - Product Schedule will be easy for you to understand. Please provide your feedback. Thanks.

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