Back dating contract software issues

That is called deferred revenue and it is a liability because delivery of the revenue is an obligation of the company.

back dating contract software issues-56

But there are many other factors to consider, such as whether you want to do business with a particular supplier again.

Both sides should conclude a negotiation feeling comfortable and happy with the agreement.

An interesting metric that many analysts and financial managers track is the book to bill ratio.

You get that by dividing monthly (or weekly or quarterly) bookings by the revenues in the same period.

If bookings are lower than revenues, that can be a negative sign.

If bookings are a lot higher than revenues, that can be a positive sign.

If you have such a business, it is important to track your yield which is the percentage of booked revenue that you actually deliver in a given period.

I like to think of the bookings to billings to collections as the way revenues “flow” through the business.

You may want to negotiate other factors such as delivery times, payment terms or the quality of the goods.

Tags: , ,