Billings
The total amount invoiced to customers during a specific period, regardless of when revenue is recognized.
Definition
Billings represent the dollar amount of invoices sent to customers in a given time period. This metric bridges the gap between bookings (when contracts are signed) and revenue (when services are delivered). Billings are crucial for cash flow management and understanding the timing of customer payments.
How to Calculate
Formula:
Billings = Revenue + Change in Deferred Revenue
or simply
Billings = Total Amount Invoiced in Period
Real-World Example
SaaS Company Quarterly Activity:
- • Q1 Revenue recognized: $100,000
- • New annual contracts billed upfront: $60,000
- • Monthly subscriptions billed: $40,000
- • Total Q1 Billings: $100,000
Of the $60,000 annual billings, only $15,000 was recognized as Q1 revenue, with $45,000 becoming deferred revenue.
Billing Patterns
Monthly
Billings closely match revenue recognition
Annual
Higher billings than revenue in billing month
Multi-year
Significant deferred revenue creation