The Difference Between Bookings, Invoices, and Revenue

In episode #351 of SaaS Metrics School, Ben breaks down one of the most misunderstood areas of SaaS finance: the difference between bookings, invoices, and revenue. Using the SaaS revenue cycle as a framework, he explains how a signed contract flows through invoicing, revenue recognition, and ultimately cash collection — and why confusing these concepts leads to bad metrics, poor forecasting, and cash flow surprises.

Resources Mentioned

• Blog post: https://www.thesaascfo.com/bookings-vs-invoicing-vs-revenue/
• SaaS Metrics Course: https://www.thesaasacademy.com/the-saas-metrics-foundation

What You’ll Learn

• What a booking actually represents in a SaaS or PLG business
• How bookings differ between sales-led and self-service models
• Why invoices are not the same as revenue under accrual accounting
• How deferred revenue works and why revenue must be recognized over time
• The full SaaS revenue cycle: bookings → invoices → revenue → cash
• Why understanding this flow is critical for financial modeling, forecasting, and cash flow planning

Why It Matters

• Prevents overstating revenue or ARR in Board and investor reporting
• Improves accuracy in cash flow forecasting and runway planning
• Ensures go-to-market metrics like CAC payback and cost of ARR are built on the right data
• Reduces confusion between CRM data and accounting system source-of-truth
• Creates better alignment between finance, sales, and leadership teams