Last week I talked about the successful partnership between a financial minded CRO and a growth minded CFO. Bookings are likely the #1 agenda item for the pair and it’s important they are clean on the criteria and method of this crucial number. Everyone will want to know it: the Board, investors, potential investors, and leadership teams. It’s the foremost area that GTM Ops can ensure accuracy.
But what exactly is a booking?
It’s the most fundamental and important unit for SaaS companies to track the performance of their sales teams, forecast revenue accurately, and calculate sales and marketing performance metrics.
It’s also extremely nuanced. I’ve come across bookings policies that have been 30+ pages. Ops team struggle with the data and process when they don’t have clear and consistent definitions around a booking. Thus, I’m sharing my cheat sheet to decode this critical concept.
And some bonus tips related to bookings:
The data should flow out of your CRM and be tracked by revenue streams (both to understand sales motions as well as for revenue recognition).
Ensure your CRM is setup properly to report this data. Any data issues will emerge during diligence for funding, M&A, IPO, etc.
Befriend your Accounting and Legal teams. A controller can best tell you the rules for revenue recognition and your legal partners can help you avoid those hidden clauses.
That’s the skinny from me this week! What other pro tips do you have?