Gross Billings
Financials
Industry:
Sector Agnostic
Aliases:
Short Definition
Gross Billings are the total value of all customer invoices issued in a period before deducting any credits, refunds, or adjustments. It represents the full invoiced amount for goods or services delivered or contracted, excluding taxes. Think of Gross Billings as the top-line invoice volume — what you billed before any reductions.
Short Definition
Gross Billings are the total value of all customer invoices issued in a period before deducting any credits, refunds, or adjustments. It represents the full invoiced amount for goods or services delivered or contracted, excluding taxes. Think of Gross Billings as the top-line invoice volume — what you billed before any reductions.
Short Definition
Gross Billings are the total value of all customer invoices issued in a period before deducting any credits, refunds, or adjustments. It represents the full invoiced amount for goods or services delivered or contracted, excluding taxes. Think of Gross Billings as the top-line invoice volume — what you billed before any reductions.
Why it matters for Investors
Sales activity pulse: Shows the total monetized volume a company is generating, even before refunds or disputes.
Pipeline strength: A fast-growing Gross Billings trend reflects expansion in customer demand and contract size.
Deferred revenue builder: High Gross Billings relative to revenue indicates strong prepaid demand (especially in SaaS).
Credit risk signal: The gap between Gross and Net Billings highlights refund or credit exposure.
Why it matters for Investors
Sales activity pulse: Shows the total monetized volume a company is generating, even before refunds or disputes.
Pipeline strength: A fast-growing Gross Billings trend reflects expansion in customer demand and contract size.
Deferred revenue builder: High Gross Billings relative to revenue indicates strong prepaid demand (especially in SaaS).
Credit risk signal: The gap between Gross and Net Billings highlights refund or credit exposure.
Why it matters for Investors
Sales activity pulse: Shows the total monetized volume a company is generating, even before refunds or disputes.
Pipeline strength: A fast-growing Gross Billings trend reflects expansion in customer demand and contract size.
Deferred revenue builder: High Gross Billings relative to revenue indicates strong prepaid demand (especially in SaaS).
Credit risk signal: The gap between Gross and Net Billings highlights refund or credit exposure.
Formula
Practical considerations:
Includes: All invoiced products, subscriptions, usage, and services before deductions.
Excludes: VAT/GST/sales tax.
Timing: Record when invoice is issued, not when service is delivered or cash is received.
Credits/Refunds: Track separately — removing them gives you Net Billings. (Credits are refunds or billing adjustments given to customers to correct invoices due to errors, disputes, or service issues and are subtracted from gross billings to calculate net billings.)
Relevance by model:
SaaS → shows contracted recurring value.
E-commerce → similar to Gross Merchandise Value (GMV) before returns.
Formula
Practical considerations:
Includes: All invoiced products, subscriptions, usage, and services before deductions.
Excludes: VAT/GST/sales tax.
Timing: Record when invoice is issued, not when service is delivered or cash is received.
Credits/Refunds: Track separately — removing them gives you Net Billings. (Credits are refunds or billing adjustments given to customers to correct invoices due to errors, disputes, or service issues and are subtracted from gross billings to calculate net billings.)
Relevance by model:
SaaS → shows contracted recurring value.
E-commerce → similar to Gross Merchandise Value (GMV) before returns.
Formula
Practical considerations:
Includes: All invoiced products, subscriptions, usage, and services before deductions.
Excludes: VAT/GST/sales tax.
Timing: Record when invoice is issued, not when service is delivered or cash is received.
Credits/Refunds: Track separately — removing them gives you Net Billings. (Credits are refunds or billing adjustments given to customers to correct invoices due to errors, disputes, or service issues and are subtracted from gross billings to calculate net billings.)
Relevance by model:
SaaS → shows contracted recurring value.
E-commerce → similar to Gross Merchandise Value (GMV) before returns.
Worked Example
Period: March
Invoice ID | Bill date | Description | Invoice Amount ($) | Credit Amount ($) | Notes |
|---|---|---|---|---|---|
A | Mar 1 | Monthly subscription | $100,000 | $0 | Regular March invoice |
B | Mar 5 | Upfront annual invoice (service Apr–Mar) | $30,000 | $0 | Deferred portion |
C | Mar 15 | One-time setup fee | $20,000 | $0 | Delivered in March |
D | Mar 20 | Refund to customer | $0 | $10,000 | Credit issued for billing error |
Gross Billings = $100,000 + $30,000 + $20,000 = $150,000
Credits = $10,000
Net Billings = $150,000 − $10,000 = $140,000
Notes:
Deferred means customers prepaid; you will earn it later as you deliver the service.
Net Billings are invoices issued; the timing of actual cash receipt is tracked separately in Accounts Receivable and collections.
Revenue is the amount earned this month based on services provided.
Always verify Net Billings equal the revenue earned this month plus the change in deferred revenue.
Worked Example
Period: March
Invoice ID | Bill date | Description | Invoice Amount ($) | Credit Amount ($) | Notes |
|---|---|---|---|---|---|
A | Mar 1 | Monthly subscription | $100,000 | $0 | Regular March invoice |
B | Mar 5 | Upfront annual invoice (service Apr–Mar) | $30,000 | $0 | Deferred portion |
C | Mar 15 | One-time setup fee | $20,000 | $0 | Delivered in March |
D | Mar 20 | Refund to customer | $0 | $10,000 | Credit issued for billing error |
Gross Billings = $100,000 + $30,000 + $20,000 = $150,000
Credits = $10,000
Net Billings = $150,000 − $10,000 = $140,000
Notes:
Deferred means customers prepaid; you will earn it later as you deliver the service.
Net Billings are invoices issued; the timing of actual cash receipt is tracked separately in Accounts Receivable and collections.
Revenue is the amount earned this month based on services provided.
Always verify Net Billings equal the revenue earned this month plus the change in deferred revenue.
Worked Example
Period: March
Invoice ID | Bill date | Description | Invoice Amount ($) | Credit Amount ($) | Notes |
|---|---|---|---|---|---|
A | Mar 1 | Monthly subscription | $100,000 | $0 | Regular March invoice |
B | Mar 5 | Upfront annual invoice (service Apr–Mar) | $30,000 | $0 | Deferred portion |
C | Mar 15 | One-time setup fee | $20,000 | $0 | Delivered in March |
D | Mar 20 | Refund to customer | $0 | $10,000 | Credit issued for billing error |
Gross Billings = $100,000 + $30,000 + $20,000 = $150,000
Credits = $10,000
Net Billings = $150,000 − $10,000 = $140,000
Notes:
Deferred means customers prepaid; you will earn it later as you deliver the service.
Net Billings are invoices issued; the timing of actual cash receipt is tracked separately in Accounts Receivable and collections.
Revenue is the amount earned this month based on services provided.
Always verify Net Billings equal the revenue earned this month plus the change in deferred revenue.
Best Practices
Track both: Use Gross Billings to gauge demand and Net Billings for realized inflows.
Separate credits: Never net them automatically — analyze refund drivers.
Check ratios: (Credits ÷ Gross Billings) shows refund leakage; keep trend stable or declining.
Align to cash cycle: Compare Gross Billings growth vs. collections to test working capital health.
Best Practices
Track both: Use Gross Billings to gauge demand and Net Billings for realized inflows.
Separate credits: Never net them automatically — analyze refund drivers.
Check ratios: (Credits ÷ Gross Billings) shows refund leakage; keep trend stable or declining.
Align to cash cycle: Compare Gross Billings growth vs. collections to test working capital health.
Best Practices
Track both: Use Gross Billings to gauge demand and Net Billings for realized inflows.
Separate credits: Never net them automatically — analyze refund drivers.
Check ratios: (Credits ÷ Gross Billings) shows refund leakage; keep trend stable or declining.
Align to cash cycle: Compare Gross Billings growth vs. collections to test working capital health.
FAQs
Is Gross Billings the same as Revenue?
No. Revenue is earned based on delivery; Gross Billings is billed before deductions. Revenue may be lower due to deferrals.Why not just use Net Billings?
Net Billings show real inflows, but Gross Billings reveal total invoiced demand before issues — useful for forecasting or auditing credit discipline.What if Gross Billings fall but Revenue rises?
That means you’re recognizing revenue from prior prepaid invoices faster than you’re issuing new ones — possible slowdown in new sales.
FAQs
Is Gross Billings the same as Revenue?
No. Revenue is earned based on delivery; Gross Billings is billed before deductions. Revenue may be lower due to deferrals.Why not just use Net Billings?
Net Billings show real inflows, but Gross Billings reveal total invoiced demand before issues — useful for forecasting or auditing credit discipline.What if Gross Billings fall but Revenue rises?
That means you’re recognizing revenue from prior prepaid invoices faster than you’re issuing new ones — possible slowdown in new sales.
FAQs
Is Gross Billings the same as Revenue?
No. Revenue is earned based on delivery; Gross Billings is billed before deductions. Revenue may be lower due to deferrals.Why not just use Net Billings?
Net Billings show real inflows, but Gross Billings reveal total invoiced demand before issues — useful for forecasting or auditing credit discipline.What if Gross Billings fall but Revenue rises?
That means you’re recognizing revenue from prior prepaid invoices faster than you’re issuing new ones — possible slowdown in new sales.
Related Metrics
Commonly mistaken for:
Revenue (earned, not billed)
Collections (cash received)
Gross Bookings (contracted, not invoiced yet)
Related Metrics
Commonly mistaken for:
Revenue (earned, not billed)
Collections (cash received)
Gross Bookings (contracted, not invoiced yet)
Related Metrics
Commonly mistaken for:
Revenue (earned, not billed)
Collections (cash received)
Gross Bookings (contracted, not invoiced yet)
Source of:
Components:
Index