Resolve Renewal Gaps in Subscription Data

Left unresolved, a renewal gap can distort your Subscription Momentum Report and create missed revenue-recognition periods. Use the Find Renewal Gaps Greater Than 1 Day and Find Renewal Gaps Greater Than 31 Days tools to find affected Transactions, then adjust your revenue schedules to close the gap.

What causes a renewal gap

A renewal gap occurs when a renewal Transaction's Start Date falls more than a set number of days after the End Date of the Transaction it renews. Renewal gaps usually happen for one of two reasons:

• A data entry error when the renewal Transaction was created
• A late renewal, where the Customer's subscription lapses while the deal is still being negotiated

Find renewal gaps in your Transactions

Go to Admin > Identify Issues, then select Find Renewal Gaps Greater Than 1 Day or Find Renewal Gaps Greater Than 31 Days. Each report lists Transactions whose Start Date falls more than the named number of days after the End Date of the Transaction they renew.

Handle a renewal gap

Gaps between the end of one subscription period and the start of the next can create confusion in your reports and revenue tracking, and can affect how Customer activity and revenue trends appear in your data.

Subscription Momentum Report

Gaps in a Transaction's End Date and Start Date can cause issues in the Momentum and Customer Count sections of the Subscription Momentum Report.

Revenue recognition

A gap in time between the End Date of a Transaction and the Start Date of the Transaction that renews it can indicate a possible gap in revenue schedules. Gaps can occur for many reasons, typically due to an error in data entry or a late renewal by the Customer. In the latter case, you must ensure that your revenue recognition dates are properly entered even if your Transaction dates reflect a gap.

Example: A Customer's subscription ends on July 14. Sales is still negotiating, so the subscription is neither cancelled nor renewed. On August 18, the Customer agrees to renew for a period of one year from Aug 18, and a one-year renewal Transaction is entered with a Start Date of Aug 18. A gap in excess of 30 days now exists between the End Date of the previous term and the Start Date of the new term.

During the gap, the Customer has had access to the subscription. Check with your auditor to see how your company should record the revenue in such a scenario. Options likely include daily recognition, with revenue recorded each day from July 15 to Aug 17 (13+ months), or a variation of this in which the revenue from July 15 to Aug 17 is recorded on Aug 18, at which point revenue is recorded each day.

You should likely define rules relating to sales compensation for scenarios such as this, since the effect is that the subscription is effectively discounted (13+ months for the price of 12). In the typical sales booking measurement, though, it appears as the equivalent of a 12-month subscription.

Related information

If you use the Advanced Subscription Momentum Report, see Understanding the Advanced Subscription Momentum Report for more on its Momentum and Customer Count sections.

For guidance on choosing how to recognize revenue for a gap like this, see Choose the Right Revenue Recognition Method.