The total value of contracts customers have committed to over a period, recognised at the moment of signing.
Bookings = Σ total contract value of all deals signed in the period
In a quarter you sign three deals: a one-year £24,000 contract, a two-year £60,000 contract, and a one-year £12,000 contract.
£24,000 + £60,000 + £12,000 = £96,000 in bookings for the quarter
Bookings count the value of deals signed in a period, regardless of when the money is collected or the revenue is recognised. When a customer signs a one-year £24,000 contract today, you book £24,000 now — even though you will invoice and recognise it month by month over the year ahead.
Bookings are a forward-looking, commitment-based measure. They tell you how much business the sales team won, which makes them a leading indicator: strong bookings this quarter become billings and recognised revenue in the quarters that follow. Because they capture future commitments, bookings will usually run ahead of both billings and revenue in a growing business.
The three are easy to confuse but distinct. Bookings is what was committed, billings is what was invoiced, and revenue is what was earned. A booking becomes a billing when you raise the invoice, and becomes revenue as you deliver the service over time.
Bookings are the earliest signal of commercial momentum — they move before billings and revenue, so they give you the first read on whether sales is accelerating or stalling. Tracking them lets finance forecast cash and revenue with a quarter or more of lead time.
There is no absolute bookings benchmark; the signal is in the growth rate and in the ratio to billings and revenue. A healthy growing SaaS sees bookings consistently outpace recognised revenue, with the gap reflecting future committed growth.
Bookings is the total value committed when a contract is signed; revenue is earned gradually as you deliver the service. A £24,000 annual contract is £24,000 of bookings on day one but recognised as roughly £2,000 of revenue each month.
Bookings is what the customer committed to; billings is what you have actually invoiced. A booking becomes a billing once the invoice is raised, which may be upfront, monthly, or on a schedule.
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