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.
Kruze Consulting is a leading CPA firm only serving funded startups. If you are a funded startup, choose Kruze Consulting’s team of CPAs, bookkeepers, CFOs, former IRS tax auditors, and venture experts. The firm handles all things Accounting, Tax, Finance, & HR: interim CFO Consulting, financial modeling, annual taxes, R&D tax credit studies, venture debt consulting, 409A reporting, bookkeeping, AR/AP, and Seed/Series A/B Fundraising Preparation. Contact Kruze today!
19 Feb 2019 - Vanessa Kruze, Founder and CPA
14 Feb 2019 - Vanessa Kruze, Founder and CPA
7 Feb 2019 - Hannah Cole-Leathers, Staff Accountant at Kruze Consulting
30 Jan 2019 - Scott Orn
28 Jan 2019 - Scott Orn