Billings
Also known as: SaaS billings, calculated billings
In short
Billings is the total amount a company invoices to customers during a period. In subscription businesses it is often calculated as revenue plus the change in deferred revenue.
Billings sit between bookings and cash. A deal is booked when signed, billed when invoiced, recognized as revenue as the service is delivered, and collected when paid.
How to calculate billings
- Formula: Billings = revenue + change in deferred revenue over the period.
- Example: Say a company recognizes 2 million in revenue in a quarter, and deferred revenue grows from 3 million to 3.5 million. Billings are 2.5 million.
- Direct method: You can also sum all invoices issued in the period.
Billings vs. bookings vs. revenue
- Bookings: The value of contracts signed, regardless of when invoiced.
- Billings: What you invoiced. A three-year deal billed annually books the full amount at signing but bills only the first year.
- Revenue: What you recognize under accounting rules as service is delivered.
- Cash collected: What customers actually paid. Late payers create a gap with billings.
Why billings matter
A leading indicator
For companies that bill annually upfront, billings show demand earlier than revenue, which lags.
Contract structure effects
A shift to monthly billing lowers billings in the short run without any change in demand. Track the pattern before reacting.
Cash planning
Billings, not bookings, drive when cash can arrive, so finance and sales leaders need to agree on timing.
How sales and RevOps teams use them
Sales leaders usually care about bookings and ARR. RevOps and finance use billings to forecast cash and understand the effect of payment terms. When a rep offers quarterly billing instead of annual upfront, bookings stay the same but billings and cash timing change.
Common mistakes
- Treating billings as revenue: Billings can run ahead of or behind recognized revenue.
- Comparing across billing terms: Mixed annual and monthly billing makes quarter comparisons misleading.
- Ignoring unpaid invoices: Billed is not collected.
Billings FAQs
What are billings in SaaS?
Billings are the total amount invoiced to customers in a period. In SaaS they are commonly calculated as recognized revenue plus the change in deferred revenue, showing how much was billed even if the service has not yet been delivered.
How do you calculate billings?
Add recognized revenue for the period to the change in deferred revenue. For example, 2 million in revenue plus a 0.5 million increase in deferred revenue gives billings of 2.5 million. You can also total invoices issued.
What is the difference between billings and revenue?
Revenue is recognized as the service is delivered over time. Billings are what you invoice, often upfront. An annual contract billed in January is fully billed that month but recognized as revenue gradually across the twelve months.
What is the difference between billings and bookings?
Bookings are the value of contracts signed, while billings are the amounts invoiced. A three-year contract is booked in full at signature, but if billed annually, only one year is billed initially.
