Churn is an unavoidable part of any subscription or recurring revenue business. This article outlines two options for marking a customer as 'Lost' when they cancel mid-term, if you use ScaleXP Invoicing.

If you are looking for how to mark a customer as lost at the end of their term, you can follow the process below or cancel their renewal. 

Summary

When a customer decides not to renew or cancels mid-term, it’s important to ensure your financial systems are updated quickly and accurately. In ScaleXP Invoicing, you can manage lost or churned customers efficiently while keeping your accounting and reporting aligned. The option you select will depend on your own internal process.

Option 1: Cancel the future invoices in HubSpot (recommended process)

If notifications of churned customers are given to your Customer Success team, this process is ideal. It allows the Sales or Customer Success team to make changes in HubSpot - with automated syncing to your accounting system and to ScaleXP. 

Step 1: Find the relevant deal in HubSpot, select ScaleXP invoicing, then View & Amend Invoices, as shown in the screenshot below. 

Step 2: Select the relevant invoice, click the three dots then select Cancel Invoice, as shown here.

Once this is done, the Cancellation will sync automatically to your accounting system. This process can take up to 1 minute. This removes all future invoices and ensures that the future customer will no longer be invoiced. 

Step 3: Mark the contract as Lost in ScaleXP

The final step is to mark the Contract as Lost in ScaleXP.  To do this, find the relevant contract and mark it as Closed or Closed Lost. 

• Closed is used if you never expected a Renewal, say in the case of a one-off service.  The system status will be “Closed No Renewal” or “No Renewal / One-Off”
• Closed Lost is used if you expected a Renewal, which did not materialise.   The system status will be “Lost”

Both options remove the Renewal, and update all tags for your metrics and KPIs. We do not currently distinguish between Closed-One Off and Closed Lost in the churn data, but we will build additional nuisance and complexity in the future, so it is best to select the most appropriate option. 

Option 2: Cancel the future invoices in your accounting system 

If notifications of churned customers are given to your Finance team, this process will work better. It allows the Finance team to make changes in the accounting system, with automated syncing to HubSpot. 

As a general rule, we recommend Option 1 because it minimises hand-offs in your company and allows the Customer Success or Sales team to handle cancellations themselves. This is a backup option should the finance team need to get involved.

Step 1: Find the relevant future invoices in your accounting system and cancel them. This will include Repeating Invoices and one-off invoices. The screenshot below shows how this can be done in Xero. QuickBooks has an equivalent screen. 

Step 2: Mark the contract as Lost in ScaleXP

The final step is to mark the Contract as Lost in ScaleXP.  To do this, find the relevant contract and mark it as Closed or Closed Lost. 

• Closed is used if you never expected a Renewal, say in the case of a one-off service. The system status will be “Closed No Renewal” or “No Renewal / One-Off”
• Closed Lost is used if you expected a Renewal, which did not materialise. The system status will be “Lost”

Both options remove the Renewal, and update all tags for your metrics and KPIs. We do not currently distinguish between Closed-One Off and Closed Lost in the churn data, but we will build additional nuisance and complexity in the future, so it is best to select the most appropriate option. 

Conclusion

This article explains how to handle mid-subscription churn.  
If you have any further comments or questions, just contact us at support@scalexp.com.