logo-hypcccycl
Log in
  • Home
  • Upcoming Game
  • Recordings
  • Exclusive Content
    • Whitepaper 1
    • Whitepaper 2
    • JMM™ Codexes
    • GTM Slack
  • About

Sales Bookings: An Introductory Guide


Explore All Blog Posts Share

April 4th, 2022

Sales Bookings: An Introductory Guide

Sales bookings are an important metric to keep track of in a sales accounting strategy. A sales booking is a form of commitment made by a customer to spend money with your company. For instance, a SaaS customer might agree to start paying for a subscription at the beginning of a new month, but they may be able to start using the software straight away.

By looking carefully at bookings, sales teams can get an insight into the potential health of the company and the upcoming income the business is set to make.

Sales Bookings Meaning: What is a Sales Booking?

Sales Bookings refer to instances wherein a customer for your brand commits to spending money with your company. A deal is “booked” or scheduled to be completed on a certain day, such as at the end of a month or at the start of a new month.

As a forward-looking metric, bookings can also indicate the amount of money a customer is expected to spend over a specific period of time. For instance, a SaaS customer could agree to sign up for a subscription service with a recurring monthly fee for a total of 12 months.

The commitment made in most sales bookings is tied to a contract in the moment of a sign-up or subscription process, which a customer sign either physically or electronically. Bookings demonstrate your customer has agreed to make a specific purchase for a set period of time.

What are the Common Types of Sales Booking?

There are various different kinds of sales bookings which might occur in a standard sales environment. Some of the most common options include:

  • New bookings: Which looks at new subscriptions and customers, as well as existing customers who have subscribed to new services or acquired new products.
  • Renewal bookings: A renewal booking refers to when an existing contract is rolled forward onto a new contract. Sometimes, the booking will be equal to the previous purchase, or it might feature a longer or shorter term.
  • Upgraded booking: Upgraded or expanded bookings refer to when a customer agrees to pay for a subscription to an upgraded service, usually with more features, and a higher price tag than the previous booking. This will often require the signing of a new contract.
  • Annual contract value bookings: In the case off multi-year contracts where bookings with a minimum of one-year revenue commitments are considered, ACV bookings are common.
  • Total contact value bookings: While ACV bookings look at contracts with a minimum of one year tied to them, TCV (Total Contract value bookings) consider the full potential duration of contract, which could be several months or years.
  • Non-recurring bookings: Non recurring bookings are bookings with no guarantee to recur the service in future. These bookings are common with set-up and installation fees in SaaS.

Why Measure the Sales Bookings Metric?

Bookings are one of the most important sales metrics to track when you want to evaluate the potential success and health of your business. It estimates the potential revenue won by your sales team including non-recurring bookings, training, and set-up fees.

The sales bookings metric can provide a more complete insight into the health of a business than the standard MRR (Monthly Recurring Revenue) calculation. This is because MRRs do not count revenue from non-recurring charges.

You can also get a better understanding of your business success rate by comparing your sales booking metrics to your recognized revenue. If your booking levels are high, but your revenues recognized are low, this indicates you may need to reconsider the effectiveness of your sales strategy and product delivery.

The Sales Bookings metric further helps CFOs and finance teams to plan cash flow for the business, and keep track of long-term growth.

Sales Bookings vs Revenue vs Billings

Notably, Sales Bookings are commonly confused with Sales billings and Sales Revenue for a lot of teams. While these concepts have various things in common, they’re not exactly the same. Sales Billings, for instance, are the amounts billed to your customers, sometimes over a certain time period, like a month or a year.

A billing involves actually collecting money from your customer, while your Sales bookings simply demonstrate what your customers have agreed to pay in future.

Revenue is similar to billing in that it involves the collection of money. However, revenue is a little more complex, it involves looking specifically at the income you earn when you provide your service to your customer. For every month you successfully deliver the service “booked” by your customer, you can “recognize” the revenue earned for that month.

Knowing the difference between sales bookings, revenue, and billings is often important in sales accounting, where it’s critical to know the impact of different deals at specific times in the company’s annual operations.

Previous posts

January 22nd, 2023
5 Sales Success Tips to Improve Your Business Results

Over the years, countless professionals have shared their own “sales success tips”, designed to boost revenue, increase conversions, and generate stronger customer relationships.

Read Now
January 21st, 2023
Finding Motivation to Sell: How to Boost Sales Motivation

Figuring out how to create and preserve sales motivation can be tricky. Even the most committed and experienced sales professionals experience a dip in drive from time to time.

Read Now
January 20th, 2023
How to Respond when a Client Asks You to “Do It Cheaper”

Knowing what to say when a client asks you to “do it cheaper” is becoming increasingly important in today’s competitive business landscape.

Read Now
Explore All Blog Posts
logo-footer-new

VandaliZing B2B since 2020

  • Terms of use
  • Cookie Policy
  • Privacy Policy
  • Blog

    Give us your email to access the full portfolio

    Cancel

    Thanks for your interest in becoming a client

    You now have 24 hours to access your safety deposit box.

    Done

      Give us your email to access the full portfolio

      Thanks for your interest in becoming a client

      You now have 24 hours to access your safety deposit box.

      Done

        Drop us your name and email

        Cancel

        You passed the first test

        You have obviously decided to disrupt yourself or your brand. The lamp you’re about to rub contains all the world’s secrets. Not really but you are about to see some savage agency work that we are pretty proud of. We’ll be in touch.

        Got it

          Attend

          Have you ever watched a fish ride a bicycle? We are hoping it's a bit more like Bo Jackson or Michael Jordan. Don't miss out on all the actions as GTM Leaders cross train cross function.

          Cancel

          Warm up your popcorn

          Prepare for disruption.

          Suspend disbelief

            Achtung! ☢️

            To attend GTM Games, please authorize yourself.

            LINKEDIN ACCOUNT
            By authorizing yourself on this website, you agree to HYPCCCYCL’s Terms & Conditions.
            For questions, please contact hello@hypcccycl.com.

            Thanks for your interest in becoming a client

            You now have 24 hours to access your safety deposit box.

            Done

              Achtung! ☢️

              To relive the GTM Games, please authorize yourself.

              LINKEDIN ACCOUNT
              By authorizing yourself on this website, you agree to HYPCCCYCL’s Terms & Conditions.
              For questions, please contact hello@hypcccycl.com.

              Thanks for your interest in becoming a client

              You now have 24 hours to access your safety deposit box.

              Done

                Achtung! ☢️

                To unlock exclusive GTM content, please authorize yourself.

                LINKEDIN ACCOUNT
                By authorizing yourself on this website, you agree to HYPCCCYCL’s Terms & Conditions.
                For questions, please contact hello@hypcccycl.com.

                Thanks for your interest in becoming a client

                You now have 24 hours to access your safety deposit box.

                Done

                  Drop us your deetz

                  Cancel

                  Thank’s for your application

                  Students will be assessed on a first-come, first-served basis. Spaces are limited to maintain optimal cohort size.

                  Got it

                    Drop us your name and email

                    Cancel

                    Thank you

                    Your request has been submitted and you will receive an email shortly

                    Got it

                      Drop us your name and email

                      Cancel

                      Thank you

                      Your request has been submitted and you will receive an email shortly

                      Got it

                        Become a sponsor

                        GTM Games is the most disruptive B2B event series ever conceived

                        We’re constantly scouring the globe for top SaaS players within our GTM ICP that share our vision for unifying Sales & Marketing. 9 days of exposure, over 1,000 enriched audience leads, and tens of thousands of eyeballs makes this one of the highest value sponsorships in all of B2B. Drop us a line.

                        close
                        Request sent

                        We are so excited to talk shop with you about partnerships! Stay tuned; we will be in touch shortly.

                        close
                        X