![]() Processes here can vary widely depending on your invoicing and accounting software. Once the contract is signed and becomes a booking in your CRM system, the contract is passed on to your accounting team to process. It tells the accounting team who to invoice, how much, what products, and when. A contract is a customer-facing document, but a it’s a lot like an operating manual for accounting. The contract contains products, pricing, and payment terms among other things. And that’s how I define a booking.Ī booking is an executed (signed by both parties) contract between you and your customer for software and/or services. ![]() ![]() The SaaS revenue cycle begins with a signed contract between you and your customer. In sales and accounting, you hear a lot of talk about bookings. I’ll also cover the calculation of contract values. With that, let’s dive in to see how a booking becomes an invoice and then recognized revenue. But after the bookings process, the revenue cycle follows the same general process. If your customers sign up via your website and pay by credit card, the bookings terminology may not be as relevant. If you target mid-market and enterprise deals or sign contracts with your customers, this post is especially relevant for you. This SaaS terminology is important for sales, customers success, and the leadership in your organization to understand. In this post, I will explain the differences among a booking, an invoice, and revenue. But what is a booking? And how does a booking differ from invoicing and revenue? SaaS is full of metrics, but in this case, we are mixing SaaS and accounting terminology to make things even more confusing. The SaaS revenue cycle all starts with bookings.
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