Description
Billing involves raising and sending invoices by businesses that will further request the customer to clear the dues by settling the invoices. Billings are when a company formally requests payment from a customer for services, and invoices are documents used for requesting settlement and record-keeping purposes.
Example
Suppose a customer signs a 3-year, $15M contract with Vareto on January 1st, 2023. This will be billed annually. Therefore, Year 1 Billing = $5M.
Why it matters
Billing is important for any business since it initiates the process of the final collection of cash from a customer and maintains the financial viability of the business.