Any finance professional will tell you that bookings are both an art and a science with cross-company implications. From Sales commissions to bonus plans, revenue forecasting to cash in door, bookings have become the rise and fall of company valuations. But they are not real if the revenue isn’t there to back it up and they certainly aren’t real if there are side deals or other detritus inserted into the deal by your team. Well, it’s all solvable with a bit of forethought, some process and perhaps technology, and some education for all involved.

1. Sponsor

2. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Why Companies Need a
Bookings Policy, and How to
Create One

3. • Recognize
why
a
bookings
policy
is
now
standard
prac6ce
for
subscrip6on
and
services
industries
• Iden6fy
how
to
define
bookings
which
align
with
go-­‐
to-­‐market
strategies
all
the
way
through
to
contracts
• Recognize
booking
nuances
between
customer
renewals,
new
customers,
cross-­‐sell
and
up-­‐sell
ac6vity
Learning Objectives
After attending this event you will be able to:

4. Proformative Event Notes
• The PPT is already posted at the event’s landing page.
• We will send you links via email to the presentation and
the recording within 24 hrs.
• For CPE: Answer all polling questions and remain for the
duration. CPE Credits awarded in 24 hours.
– Questions on CPE? Email cpe@proformative.com.
• We want to hear from you! Ask questions for the Q&A
session at the end of the event.
• Please take the short survey at the end of the webinar.

5. Introducing Proformative Academy:
• On-demand video courses taught by senior practitioners
• Over 200 finance and accounting courses - adding a course every day!
• CPE for 7 certifications: CPA, CMA, CTP, FP&A, CFE, CRMA and CIA
• Unlimited learning and CPE for $499/year!
Welcome to Proformative
“Proforma(ve
is
the
leading
professional
development
resource
for
every
member
of
the
Office
of
the
CFO”
If
you
want
to
learn
more:
Tell
us
on
your
survey!

6. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Why Companies Need a Bookings Policy,
and How to Create One
Mike Murphy, CPA, Chief Business Officer,
goTransverse

7. 7
$
$ $
We Killed our Numbers!
We Missed our Revenue!
$$
$
$

8. Traditional Business
8
Ø Bookings as a predicable proxy for revenue
Ø Based on concluded arrangement of goods and/or services
Ø Time to revenue is in sync
Ø Valuation based on earnings
photo by Ford Europe on flickr

9. Cloud/Xaas* Business
9
Ø Bookings may NOT be a good proxy
for revenue
Ø Based on concluded arrangement of
goods and/or services…
Ø Timing gap between bookings and
recognized revenue
Ø Valuation based on future revenue
*XaaS = anything as a service

10. 10

11. Polling Question

12. Bookings Policy
12
• Purpose: To ensure bookings accurately and consistently
reflect the future revenue potential of new business
arrangements executed during the reporting period
• Owner: Chief Accounting Officer, VP of Finance
• Includes:
– What constitutes a booking
– Value of said bookings
– When bookings are realized
– Order Documentation
– Contingencies, Creditworthiness and Collection, Timeframes and
Exceptions

13. Bookings Policy
13
Ø Intend to represent this to your board and/or investors?
Ø Manage change in contracts and sales compensation?
Ø Enforce the same level of scrutiny as your rev rec policy?

14. Go-to-Market (GTM) Alignment
14
photo by Gene Wilburn on flickr
A Good Deal
• Formulated/aligned with
overall go-to-marketing
• Pricing tied to terms and
conditions to customer that
can afford services
• If deviated, then work
within organization to
ensure everyone is aligned
and committed to delivering
on parameters

15. Polling Question

16. Value of a Booking
16
• Contract value – commitment vs. non-commitment
– How “sticky” is the solution?
– How quickly can a customer start to receive value?
– What “gives” in order to get a commitment?
– If solution is sticky, what does a commitment mean?
• What is included in a booking?
– Not all bookings have the same value
– Different offerings, services, etc have different value to the
company

17. Tie Bookings to Revenue
17
• If driving bookings, tie to future revenue plans
– Understand various rev rec criteria based on GTM and offerings
– Build revenue “waterfall” predicting when bookings turn to revenue
– Ensure that “triggering events” are captured and monitored
• If paying sales teams on bookings, what happens “if”
– Rights to “claw back” if the booking never converts to revenue?
– Show negative booking?

18. Net New Customers
18
• When does the customer have to start paying?
• Is there an implementation period? If so, how long and
when can customer start receiving the benefit of solution?
• What if take order but it’s not deployed for 12 months – is
that a booking?
• A history of failed deployments? If so, is it material?
• In the contract, what “outs” does the customer have? Is
the contract worth the paper it is written on?

19. Up-Sell, Cross-Sell and Renewals
19
• How are up-Sells or cross sells measured? Are they
dilutive to the original contract?
• Is sales creating bookings thru existing revenue streams
and creating commitments resulting in lower revenue?
• What is your policy around renewals?
• Are “one time” items included in bookings? (creating an
inflated view of long term subscription valuation)

20. In Summary
20
Ø All businesses need a bookings
policy
Ø Bookings policies must align with
go-to-market strategy
Ø Contracts & sales compensation
must align with bookings policy
Ø Only YOU can define the
company’s bookings policy
SURPRISES

21. Thank You

22. Q & A

23. • Join us at www.proformative.com to continue the
conversation with your peers in our community
• If you want an introduction to today’s speaker or
sponsor, or want to know more about
Proformative Academy, tell us on the survey!
• Thanks to our speaker
A Few Final Items

24. Sponsor

25. Polling Question