ANS-1785 · REVENUE RECOGNITION
How to Prevent Contract Renewals and Model Churn in NetSuite
This guide outlines the steps to effectively mark contracts as non-renewing within NetSuite's contract renewal module, helping to accurately model churn.
Short answer
To prevent contract renewals and model churn in NetSuite, mark relevant sales order line items for renewal exclusion (if applicable to your configuration). Additionally, ensure the associated contract record and the initial install base contract are set to inactive. This prevents automatic renewal and accurately reflects non-renewing services.
Scenario
Organizations utilizing NetSuite's contract renewal module often need to account for pre-known non-renewals or churn. Accurately modeling these situations is crucial for financial forecasting and service management. This requires specific actions to prevent contracts from automatically renewing.
Solution
To prevent a contract from renewing and to accurately model churn within NetSuite's contract renewal module, follow these steps:
If your NetSuite configuration includes a mechanism for renewal exclusion on Sales Order line items, ensure this option is selected for the relevant items.
Check the "inactive" box on the associated contract record.
Make the install base (the very first contract) inactive as well.
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