Bookings, billings and revenue

Three measures of the same contracts at three timings: contract value at signature, invoices issued, and value recognised as earned. They differ by deferral and release, and a bridge between them is published with the numbers. Every report names which of the three it shows.

DefinitionThree measures of the same contracts at three timings: contract value at signature, invoices issued, and value recognised as earned. They differ by deferral and release, and a bridge between them is published with the numbers. Every report names which of the three it shows.

Over a contract's term

Bookings equal the sum of billings equal the sum of revenue. A contract that fails this has a schedule that was never built.

The governance rule

"Revenue" on a slide that shows bookings is the failure the rule exists to prevent.

How it is computed

Three totals for the same contracts: value signed in the period, invoices issued in the period, and revenue recognised in the period. A bridge shows the timing differences between each pair.

Example

A three-year contract for $360,000 signed in March, billed annually in advance, is $360,000 of bookings, $120,000 of billings and $100,000 of revenue in the first fiscal year.

Where it goes wrong

Sales reports bookings, finance reports revenue, and the board sees both called sales. Each is right and they will never match without the bridge.

Articles that use this term

Board and management reporting · Finance and FP&A teams

Bookings, billings and revenue: one reconciliation before anyone reports a number

Why sales, finance and the board each quote a different figure for the same quarter, the three definitions behind them, the bridge from bookings to billings to recognised revenue with the timing and the adjustments that separate them, the identity that ties the three together, and the governance rule that every report names which of the three it is showing.

16 Sept 20262 min read Board and management reporting

Ten questions a CFO asks about sales data, and the table that answers each

The ten questions a chief financial officer puts to the commercial team, does the sales number reconcile, how concentrated are we, what is the base worth, is the forecast believable, where is revenue leaking, what does it cost to serve the top accounts, are credits under control, is the pipeline real, what did the discounting cost, and what changed, each with the computed table that answers it, the identity that makes the answer trustworthy, and the answer a CFO should refuse.

16 Sept 20263 min read Forecast and pipeline · SaaS

Ten questions a SaaS CRO asks about the base, and the table that answers each

The ten questions a SaaS chief revenue officer puts to the sales and success teams about existing customers, what is net revenue retention by cohort and which cohort broke, which accounts renew inside 120 days under their seats, is the expansion pipeline on the accounts with whitespace, which onboardings are behind the milestone that predicts renewal, what is whitespace reconciled to ARR, which accounts are over their cap, which accounts have gone untouched, what do bookings, billings and revenue each say, which deals slipped three times, and what changed, each with the table from the subscription ledger, the usage export and the CRM, and the answer to send back.

16 Sept 20262 min read Data quality and reconciliation

The identity by industry: what has to sum to what on twelve desks

Every report on this site rests on an identity, a sum that must hold before any measure is read, and the sum is different on every desk: revenue to the ledger, TEU to booked TEU, seats to contracted seats, controls to the register, rental days to invoiced revenue. This hub gives, for twelve industries, the identity, the exports it joins, the failure it most often catches, and the guide where it is used.

16 Sept 20263 min read How-to guides

The difference pages: twenty pairs of sales terms that get swapped, and the line between each

A hub for the comparison pages on this site: churn and dormancy, win rate and close rate, pipeline coverage and weighted pipeline, OTIF and fill rate, gross margin and contribution, KPI and metric, leading and lagging indicators, concentration ratio and Herfindahl index, share of wallet and market share, renewal and retention, and more. Each page gives both definitions, computes both on the same rows, and says which to use when. This page lists them with the one-line difference for each.

17 Sept 20264 min read