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At the end of your first month with revenue recognition on, you’ll want to confirm the numbers make sense and tie back to your billing. Here’s how to read your first period.
1

Open the Recognized Revenue report

This shows what you earned during the month, day by day and in total. See Recognized Revenue.
2

Open the Deferred Revenue report

This shows what you invoiced in advance but haven’t earned yet. See Deferred Revenue.
3

Reconcile against your invoices

For advance-billed invoices, recognized revenue plus deferred revenue should equal the pre-tax invoiced amount.
4

Spot-check a subscription with the Revenue Waterfall

Pick one annual or multi-month invoice and confirm it releases across the right months. See Revenue Waterfall.

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A quick reconciliation example

Say in January you invoiced a single $1,200 annual subscription in advance (pre-tax), running January 1 to December 31. Recognized plus deferred equals the pre-tax invoice. That’s the check that should always hold for advance-billed revenue.

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What to expect that might surprise you

  • Recognized revenue won’t match cash collected. Payments don’t move revenue. The gap is your receivables and deferred revenue. See Payments.
  • Tax isn’t in recognized revenue. Reconcile against the pre-tax invoice amount, not the gross total. See Taxes.
  • Usage figures finalize at invoicing. In-arrears usage is recognized as it’s consumed and settles when the invoice issues.
Revenue before you enabled the feature isn’t reconstructed day by day, so your first period reflects current billing going forward. Once a month is closed, Lago doesn’t rewrite it; late events are handled through a manual adjustment in a later period.