Sales and bookings are two terms that are often used interchangeably in the business world. However, there is a big difference between the two, and it's important to understand the distinction. Here's a look at the key differences between sales and bookings.
Sales is the total revenue generated from the sale of goods or services. This figure includes all revenue streams, such as cash, credit, and barter. Sales is a top-line number that reflects the total amount of money that a company has brought in from its customers.
Bookings, on the other hand, is a metric that measures the value of contracts that have been signed. This number reflects the total value of all future revenue that has been contracted, but has not yet been recognized. In other words, bookings is a forward-looking metric that gives a snapshot of future sales.
Now that we've defined sales and bookings, let's take a closer look at the key differences between the two:
Sales and bookings are two important metrics in the business world. However, there is a big difference between the two. Sales is a lagging indicator that looks back at what has already happened, while bookings is a leading indicator that looks forward at what is likely to happen in the future. Additionally, sales is recognized immediately when the transaction occurs, while bookings is only recognized when the service is delivered or the product is shipped. Finally, sales is a public metric that is typically disclosed in a company's financial statements, while bookings is often a private metric that is not disclosed.