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First they need to know how well the company is doing on a total sales basis.
Bookings vs revenue definition. So you sold something for 50. A booking is when the customer makes a commitment via a contract to buy your services or product. This is particularly necessary as mrr monthly recurring revenue does not count in revenues from non recurring charges.
The 120 is a sale a booking. Recognized and deferred revenue example. Looking forward there is now only 2m in backlog against a current revenue number of 7m.
Not all sales can be booked as revenue at the time when a sale contract is signed. You sell a membership to your site for 120 a year. Quite simply this represents how much in both value and deal count was booked by the sales rep.
One of the most important sales metrics for companies to track and analyze is bookings. An entertainer may book a bunch of shows in advance but have one or more cancel before show time. The ceo needs this information at two levels.
Bookings for future delivery have a higher potential for cancellation or modification than goods or services ready for a delivery. That is the revenue. You received the 24 000 contract that you booked the booking on january 15.
Thus it is safer to recognize the revenue at the time of the show rather than at booking. Revenue might be the same thing 50. That s called deferred revenue.
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