What are billings?
Billings is the total amount a company invoices its customers in a period, whether or not the service has been delivered or the cash has come in. In SaaS you calculate it as revenue plus the change in deferred revenue. Billings is not a GAAP measure. It sits between bookings, what was signed, and revenue, what was earned. Updated October 2026: added a bookings, billings and revenue table, the formula with filing sources, and a month-by-month example.
The word has other meanings. Top billing is where a name sits on a poster, and Billings is a city in Montana. This page covers the finance meaning: dollars invoiced.
Bookings vs billings vs revenue
Bookings, billings and revenue are three dates on the same contract. A deal is booked when it is signed, billed when the invoice goes out, and counted as revenue as the service is delivered. In SaaS, where annual and multi-year contracts are common, revenue recognition can lag the invoice date by months.| Bookings | Billings | Revenue | |
|---|---|---|---|
| What it measures | Value of contracts signed | Value of invoices sent | Value earned by delivering the service |
| When it is recorded | On the day the contract is signed | On the invoice date set by the payment terms | Spread over the service period under ASC 606 |
| GAAP or not | Not GAAP, an operating metric from the CRM | Not GAAP, reported by public companies as a supplemental measure | GAAP, on the income statement |
| Who watches it | CRO, sales leaders, the board | CFO, finance team, investors | CFO, auditors, investors |
| What moves it | Deals won, net of cancellations if you track net bookings | Payment terms: annual prepay, quarterly, monthly | Contract start dates and length |
| $60,000 annual prepaid deal | $60,000 in the month signed | $60,000 in the month invoiced | $5,000 a month for 12 months |
The formula for billings
The math is simple. Billings = revenue + the change in deferred revenue.
The change in deferred revenue is the ending balance minus the starting balance. Every dollar you invoice either becomes revenue this period or waits in deferred revenue until you earn it. That is why the formula works. Public companies call this calculated billings. As a public-company example, Slack's 2019 SEC filing defined it as "revenue plus the change in our deferred revenue" and listed it as a non-GAAP measure.
Two variants are worth knowing:
- Contract assets. Sometimes you earn revenue before you can send the bill. That amount sits in contract assets, not in deferred revenue. So Ping Identity's filing subtracts the change in contract assets to fix it. See unbilled vs deferred revenue. - Net billings. Net billings leaves out sales tax and takes out credits and refunds, per PortfolioIQ's definition. Total billings is the gross figure before those come off.
Worked example: a $60,000 annual prepaid contract
This example is illustrative. A customer signs a $60,000 one-year contract on December 15. Service runs January through December. The full year is invoiced on January 1 and recognized at $5,000 a month.
| Month | Bookings | Billings | Revenue | Deferred revenue at month end |
|---|---|---|---|---|
| Dec (signed) | $60,000 | $0 | $0 | $0 |
| Jan (invoiced, service starts) | $0 | $60,000 | $5,000 | $55,000 |
| Feb | $0 | $0 | $5,000 | $50,000 |
| Mar | $0 | $0 | $5,000 | $45,000 |
| Apr | $0 | $0 | $5,000 | $40,000 |
| May | $0 | $0 | $5,000 | $35,000 |
| Jun | $0 | $0 | $5,000 | $30,000 |
| Jul | $0 | $0 | $5,000 | $25,000 |
| Aug | $0 | $0 | $5,000 | $20,000 |
| Sep | $0 | $0 | $5,000 | $15,000 |
| Oct | $0 | $0 | $5,000 | $10,000 |
| Nov | $0 | $0 | $5,000 | $5,000 |
| Dec | $0 | $0 | $5,000 | $0 |
| Total | $60,000 | $60,000 | $60,000 |
The quarter view tells the same story. Q1 billings were $60,000: $15,000 of revenue plus a $45,000 rise in deferred revenue. Q2 billings were $0: $15,000 of revenue and a $15,000 drop in deferred revenue.
Now bill the same contract quarterly in advance. Q1 billings fall from $60,000 to $15,000. Revenue does not change. That is why any billings trend needs a note on payment terms. And on net 30 terms, the cash from the January invoice lands in February, a fourth date on the same deal.
Why billings leads revenue
Revenue is tied to the service period. Billings is tied to the invoice. Because revenue trails the invoice by the length of the contract, billings growth in one quarter predicts revenue growth in the quarters that follow. A strong Q3 on annual prepay shows up in Q3 billings right away and in revenue across the next 12 months.
Billings as a CFO and investor metric
CFOs use billings to project cash. An annual invoice turns into cash one payment term later. Multi-year contracts billed each year are more complex but follow a fixed schedule once mapped.
Investors use billings growth to read demand when timing holds revenue back. That happens after a move from monthly to annual billing, a shift to back-loaded deals, or a big batch of renewals in one quarter.
Billings is lumpy by season. Pete Furseth, ORM's COO, sees Q4 as the largest quarter across ORM customers, followed by Q2, and the third month as the largest in every quarter. Slack's filing named the same pattern: a greater share of its billings came in its fourth quarter. Compare billings to the same quarter last year, not the quarter before.
Billings can also be pushed around. Pulling deals forward or offering longer payment terms lifts one quarter at the cost of later ones. Pete names two costs of a pull-forward: the deal usually closes at a discount, and next quarter starts with less pipeline. Analysts track the ratio of billings to revenue over time to spot the pattern.
Bookings, billings and revenue have to reconcile
The three numbers should tie out, and when they do not, the cause is usually a definition. Billings equal revenue plus the change in deferred revenue, so any two of those numbers fix the third. Bookings feed all of them through payment terms and service dates.Pete says the slowest part of a new ORM rollout is often agreeing on what a field means. One customer could not say which field held the closed-won booking amount. It took five to seven rounds and custom logic to get it right. Another account had nine amount fields, covering TCV, ACV, ARR and renewal amount, plus older fields nobody had filled in since 2021. ORM's validation step checks that a year of bookings in ORM matches what the company reports internally.
Do the same check for billings before they go in a board deck. Pete's rule for board trust is simple. If a number shows up on one slide, it should match on the next. If it changed, say why.
Billings in the revenue metrics stack
Billings sits closest to cash and commercial activity in the reporting stack. For the ARR view of contracted recurring revenue, see annual recurring revenue. For the booked-vs-billed distinction, see bookings vs. revenue. For period-over-period growth, see net new ARR.
For why the two numbers never match on the income statement, read billings vs revenue. For the step from invoice to bank, read billings vs cash collections. To track how fast signed deals turn into invoices, use the billings-to-bookings ratio.
Renewals are the easiest billings to predict. The amount is known, either the same as last year or with a price lift, and so is the date. Pete sees renewals close in a window of about 30 days either side of the renewal date. New business is harder, because close dates move. For the full method, see how to forecast billings.
Frequently Asked Questions
What are billings?
Billings are the dollars a company invoices its customers in a period. In SaaS you can also work them out as revenue plus the change in deferred revenue. Billings count the invoice, not the cash. A $60,000 annual contract billed up front is $60,000 of billings in the month it is invoiced, even if the customer pays a month later.
Is it billing or billings?
Both are correct, for different jobs. Billing is the act of invoicing customers, or the team that does it. Billings is the metric: the total amount invoiced in a period. So you would say the billing team sent the invoices, and Q3 billings were $2.6 million. On a finance report, billings always means invoiced dollars.
What are total billings?
Total billings is the gross value of every invoice sent in a period. That covers new deals, renewals, services and usage. Net billings takes out credits and refunds and leaves out sales tax. Pick one of the two, write it down, and use it every quarter. If you switch between gross and net, the trend line stops meaning anything.
How do you calculate billings?
Take revenue for the period from the income statement. Add the change in deferred revenue from the balance sheet. Say revenue was $2.0 million and deferred revenue rose from $5.0 million to $5.6 million. Billings were $2.0 million plus $0.6 million, or $2.6 million. If deferred revenue fell instead, billings come in below revenue.
What is the difference between bookings, billings and revenue?
Bookings are signed contract value, counted on the day the deal is signed. Billings are invoiced value, counted on the invoice date. Revenue is earned value, counted as the service is delivered. One $60,000 annual contract can be a December booking, a January billing, and $5,000 of revenue in each month of the year that follows.
Why do investors focus on billings?
Revenue recognition is governed by contract terms and accounting rules, which can lag the actual commercial activity of a business. Billings is closer to cash collection and reflects the real volume of business closed and invoiced in a period. For pre-profitability SaaS companies, billings growth signals momentum before it fully appears in recognized revenue.
Put these metrics to work
ORM builds custom revenue forecast models that turn concepts like billings into prescriptive action for your team.
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