Definition: In calculating deferred revenue, bookings, or cash collected, refers to the prepayment or annual subscription that a customer gives a business. This is added to that businesses cash flow, but shows up as deferred revenue in their liabilities until the service or good paid for has been fully delivered.

In Plain English: Bookings refers to the amount of money paid up front as a prepayment or annual subscription from a customer.

Example: A customer pays for a $120 annual subscription from your company. Using the deferred revenue accounting method, your booking for the transaction are $120 and your monthly revenue from the transaction is $120/12 mo=$10 mo

It is essential to understand bookings when calculating deferred revenue. Bookings immediately infuse the full prepayment of cash into your bank account, but they also add deferred revenue into your liabilities until the service or good that has been paid for is fully delivered.