Bookings vs Revenue

Bookings vs Revenue
Posted on Wed, 25 October 2017 by Scott Orn

Video: What is the Difference Between Your Startup’s Bookings and Revenue?

At Kruze Consulting, we get tons of questions about the difference between bookings and revenue.

In the software as a service world, bookings are the culmination of all the contractual payments you’re gonna get, usually over the next 12 months. So, if you close a $1.2 million contract, over the next 12 months you recognize that as bookings.

Now, revenue, that is a backward-looking metric and revenue you recognize over the length of the service period. So, if you close that same $1.2 million contract over 12 months, each month going forward you’re gonna recognize $100,000.

That’s the difference between bookings and revenue. The board, the CEO, and the sales team love bookings. That’s a forward-looking metric, and the accountants, like us, love revenue.

Interesting article? Sign up for our updates: