Viability Matters

If you're offering multi-year options with positioning like, buy two years now, and we'll give you year three for free, so you can pull revenue forward, then you're in trouble. 

There is no secret at play.  If you need tomorrow's cash flow today, you have problems. 

Don't let sellers, that are compensated on bookings, convince you that pulling forward dollars today is better than waiting for it.  You hired them because they're good sellers, and they're putting their skills to work to sell you on the idea that these pull forward schemes are good business.  They're good for compensation, but not typically good for business viability.  What about Net Present Value (NPV)?  NPV is beneficial only when you can immediately invest the money.  Not when you immediately pay commissions and taxes, and spend it.

When you get to year three you'll have no expected cash from that previous sale.  You'll either need new sales to fund the business, borrow, or maybe you actually did save and invest that pulled forward cash, so you'll survive on the interest income (congratulations if that's true).  You can't even recognize the pulled forward revenue until the future date of service delivery anyway.

Think about the long term viability of your business and take action accordingly.

I hope this helps.

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