Billings

Billings are the total amounts you invoice customers in a period. Bookings count when a contract is signed. Billings count when you send the invoice. Of the three stages, billings are the closest to cash, so they predict the money about to arrive.

How to calculate billings

Add up every invoice issued in the period. From financial statements, you can also add the change in deferred revenue to recognized revenue.

A customer on an annual plan is invoiced $12,000 in January. All $12,000 counts as January billings. Only $1,000becomes recognized revenue that month. The other$11,000 is deferred revenue, billed but not yet earned.

Why billings matter

• Billings predict cash inflow better than revenue, which is spread over the service period.
• Comparing billings with bookings shows how fast signed deals turn into invoices.
• Businesses that bill annually up front often have monthly billings well above recognized revenue. That is normal.

Billings vs bookings vs revenue

A deal is booked when signed, billed when invoiced, and recognized as revenue when the service is delivered. Bookings and billings are non-GAAP operating metrics. Recognized revenue is the GAAP figure on the income statement. Track all three, because any one of them alone can make the business look better or worse than it is.