Types of Forecasted Revenue

It’s a nice metric to have known and predicted income, especially for micro and small businesses.

Makes any and all businesses feel safe, effective and confident in their market and decision-making. Also unlocks several useful levers which only come to light when the pipeline of demand is strong.

There are a few different ways of talking about this pipeline of forecasted revenue, with several related and similar terms. Here they are:

1. Committed Revenue

Income that is not yet received but is contractually agreed upon.

Considered highly reliable because it's backed by signed agreements or purchase orders.

Common in SaaS, subscription, and B2B service models.

Accounting Status: Not yet recognized as revenue; may be part of backlog or deferred revenue.

2. Forward Bookings or Forward Orders

Future-dated sales or contracts that are already secured - very similar to ‘Committed Revenue’.

Indicates strong demand pipeline.

May not yet be contractually binding (depends on terms) and could be scuppered by an issue with delivery, or changed by a cancellation, change, return etc.

Common in Travel, Logistics, and Manufacturing.

Accounting Status: Not recognized until goods/services are delivered.

3. Booked Revenue

Refers to revenue from deals that have been closed and are expected to be delivered in the future.

Often used in sales to indicate a deal has been won.

Common in Sales, Consulting, Enterprise

4. Deferred Revenue

Income received in advance, for goods or services to be delivered in the future. Essentially unearned income that the company owes in services or goods.

It’s a liability on the balance sheet until the service is performed.

Common for subscriptions, prepayments, retainers

Accounting status: Recognised gradually, as service is delivered

5. Backlog

All future revenue that is contractually secured but not yet delivered or recognized in the accounts.

A forward-looking metric that helps businesses understand how much revenue is “in the queue.”

6. Pipeline Revenue

More speculative and refers to potential income from deals that are in progress but not yet closed.

It’s far less certain than committed or booked revenue and ought to be treated as such.

Can though be a useful leading indicator.