> ## Documentation Index
> Fetch the complete documentation index at: https://getlago.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Review your first reporting period

> Read and reconcile your first month of recognized revenue.

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.

<Steps>
  <Step title="Open the Recognized Revenue report">
    This shows what you earned during the month, day by day and in total. See [Recognized Revenue](/docs/guide/revenue-recognition/reports/recognized-revenue).
  </Step>

  <Step title="Open the Deferred Revenue report">
    This shows what you invoiced in advance but haven't earned yet. See [Deferred Revenue](/docs/guide/revenue-recognition/reports/deferred-revenue).
  </Step>

  <Step title="Reconcile against your invoices">
    For advance-billed invoices, recognized revenue plus deferred revenue should equal the pre-tax invoiced amount.
  </Step>

  <Step title="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](/docs/guide/revenue-recognition/reports/revenue-waterfall).
  </Step>
</Steps>

## 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.

| Figure                         | Amount         | Where to find it            |
| ------------------------------ | -------------- | --------------------------- |
| Recognized revenue in January  | \$101.92       | Recognized Revenue report   |
| Deferred revenue at January 31 | \$1,098.08     | Deferred Revenue report     |
| **Total**                      | **\$1,200.00** | Matches the pre-tax invoice |

Recognized plus deferred equals the pre-tax invoice. That's the check that should always hold for advance-billed revenue.

## 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](/docs/guide/revenue-recognition/how-it-works/payments).
* **Tax isn't in recognized revenue.** Reconcile against the **pre-tax** invoice amount, not the gross total. See [Taxes](/docs/guide/revenue-recognition/how-it-works/taxes).
* **Usage figures finalize at invoicing.** In-arrears usage is recognized as it's consumed and settles when the invoice issues.

<Warning>
  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.
</Warning>