Bookings
A booking is the contractual commitment a customer has made, distinct from billings, which is what has been invoiced, and from revenue, which is what has been earned.
Bookings, billings, and revenue are three different clocks on the same transaction, and conflating them is the most common source of executive-level number disagreement. A three-year contract signed in Q1 is one booking event, twelve billing events, and thirty-six months of recognition.
Bookings also require their own definitional discipline: whether they are measured as total contract value or annual contract value, how multi-year and ramped deals are treated, and how amendments and co-terminated expansions are counted. Each choice changes the headline number by a large factor.
Where it breaks
Sales reports TCV bookings and finance reports ACV, and the board deck contains both without labels.
Related terms
- Revenue recognition
- Revenue recognition is the determination of when earned revenue may be recorded, governed by performance obligations rather than by cash timing.
- Annual recurring revenue (ARR)
- ARR is the annualized value of contracted recurring revenue at a point in time, a management metric, not a GAAP one.
- Sales forecast
- A sales forecast is a derivation from pipeline state under a stated method, not a negotiated commitment collected up the management chain.
- Quote to cash (QTC)
- Quote to cash is the end-to-end chain from configured quote through contract, order, invoice and collection, and the point where sales structure meets financial truth.
Field notes on this
- Four clocks: bookings, billings, revenue, and cash
Commercial commitment, invoicing, recognition, and collection answer different questions. Reconcile the clocks without treating them as one metric.