Use the contracts object in HubSpot as a centralized source of truth for committed revenue. Contracts integrate with Commerce Hub to merge subscriptions and invoices from an initial quote, and include the option to manage mid-contract changes, and renewals. Contracts can be used with other records and tools, such as deals and quotes, to manage the revenue lifecycle.
Learn how you can use the contract record for your business, including:
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How to use contracts in combination with other HubSpot objects such as deals, quotes, and invoices.
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How to manage mid-contract changes and renewals.
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How proration is managed when making contract changes.
Before you get started
What is a contract?
The contract is a centralized source of truth for committed revenue in HubSpot, detailing products, revenue metrics, and changes over time. Unlike deals, which track individual sales opportunities, contracts are designed to support the entire customer agreement lifecycle, including amendments and renewals.
With contracts, your teams can report on revenue metrics, set up renewals and amendments, and align revenue operations across the business.
Contracts can be created in HubSpot, associated with related records, and used in reporting. Change and renewal quotes can be added to contracts to reflect the customer's current arrangement.
How is a contract created?
A contract record is automatically created when a quote is accepted. The record provides an overview of key contract details, such as contact and company information, committed revenue, and associations to other records.
How to use deals, quotes, contracts, and invoices together
Use a deal to track a sales opportunity and close it. A quote can be created, based on the deal, and sent to the buyer to review. Once the quote is accepted, a contract is automatically created to reflect the revenue commitment. Invoices are issued for payment. You can collect payments in HubSpot or manually mark invoices as paid if using another payment method.
Use the contract to view the following details:
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Status: view the current status of the contract.
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Financial and revenue information: view the total contract value (TCV), annual contract value, monthly recurring revenue (MRR), and annual recurring revenue (ARR).
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Billing details: understand the billing details including the billing contact, billed amount, billing history, and upcoming payments.
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Renewal dates: view when the renewal of the contract is due.
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Associations: view the records the contract is associated to including contacts, companies, deals, invoices, line items, payments, quotes, and subscriptions.
How to manage future and mid-contract changes
Future and mid-contract changes can be managed through change quotes, which must be associated with a deal (e.g., expansion or upsell). Deals can be created during the change quote process or created separately and manually associated. Once change quotes are accepted, the contract is updated with the changes outlined in the quote. Consider setting up different pipelines for change quotes' associated deals (e.g., expansion, upsell). The contract history tab updates whenever changes are made to the contract, either directly or through change quotes.
How to manage renewals
Renewals can be triggered through renewal quotes, which must be associated with a deal. Deals can be created as part of the renewal quote process, or created and associated manually. Once the renewal quote is accepted, a new contract is created and is automatically associated with the existing contract. Consider setting up a renewal pipeline for deals associated with renewal quotes.
How is contract proration calculated?
If the proration setting is turned on, mid-term changes are prorated daily based on the number of days remaining in a billing term. The daily rate of a line item is calculated and applied to the number of days left in the term starting from the Effective date of the change. If the proration setting is turned off, mid-term contract changes will follow the next billing cycle.
When a mid-term contract change is made, the existing line items are updated based on the line items and acceptance date of the change quote. Existing line items are shortened, with new line items added after it. Line items on change quotes and contracts have unique record IDs. Learn more about line item behavior.
Next steps
Commerce Hub
Professional, Enterprise
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