When a customer commits to spending money with you how do you label that cash? Revenue? Nope. You can't call it revenue because no service has been performed and you haven't collected a single dollar yet.
So, this in-between period is pretty much a customer saying "hey, I want to spend money with your company, here's what I'll commit to spending". In SaaS we call this a booking.
Bookings are an annualized recognition of the many streams of recurring revenue (MRR and ARR) your SaaS business generates. Put another way: bookings are the sum of all the revenue promised to your business through any contracts signed.
Not tracking and measuring these revenue streams in the proper fashion can bring audit troubles (read: the government not being happy with you), or worse miscalculate the growth of your business and potentially nose dive too far into the red. To clear up any confusion, let's take a look deeper into what exactly a booking is, why it's important, and how you can best optimize bookings for your SaaS company.