> ## 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.

# Revenue Waterfall

> How each invoice releases into revenue across current and future periods.

The Revenue Waterfall answers: **when will the revenue we've invoiced actually be earned?** It takes amounts you've billed and lays out, period by period, how they release into recognized revenue. It's the clearest view of how a single annual invoice turns into twelve months of revenue.

## Booked revenue

**Booked revenue** is the amount of the invoices before tax and before any applicable discounts. It's the gross pre-tax value of what you billed, and it's the starting point of every waterfall row.

The waterfall is organized as a **cohort by booking month**. Each cohort groups everything booked in a given month, then tracks that booked amount across periods:

* **When it's recognized**: reading across the period columns shows how the cohort's booked revenue is earned over time, period by period, until it's fully recognized.
* **Fully recognized**: the point where the cohort's release schedule sums back to its booked amount, with nothing left to earn.
* **What remains deferred as of now**: the portion of the cohort still sitting in deferred revenue today, waiting to be earned in future periods.

So a single cohort tells you three things at a glance: how much you booked that month, how much of it you've already earned and when, and how much is still deferred right now.

## When to use it

* Forecasting recognized revenue from contracts you've already invoiced.
* Explaining to finance why this month's recognized revenue differs from this month's billings.
* Auditing how a specific invoice spreads across periods.

## Who uses it

Finance and RevOps doing revenue forecasting and audit.

## Main fields

| Field                  | What it means                                                                                    | How to use it                                         |
| ---------------------- | ------------------------------------------------------------------------------------------------ | ----------------------------------------------------- |
| Source                 | The invoice or subscription the revenue comes from.                                              | Trace a row back to what was billed.                  |
| Booked revenue         | The pre-tax invoice amount, before any applicable discounts. The total being released over time. | The starting point of the waterfall.                  |
| Per-period recognition | How much of that amount is recognized in each period.                                            | Read across to see the release schedule.              |
| Recognized to date     | The portion earned through the current period.                                                   | Where the cohort stands now.                          |
| Remaining (deferred)   | What's still to be recognized in future periods.                                                 | Future revenue already locked in, deferred as of now. |

## How to read it

Each row is a source of revenue. Reading left to right across the period columns shows how that amount is recognized over time. The columns add up to the full pre-tax amount invoiced.

## Example

A \$1,200 annual subscription invoiced in advance on January 1, released monthly across the year (each month's figure is the sum of that month's daily recognition).

| Source              | Amount invoiced | Jan      | Feb     | Mar      | ... | Dec      | Remaining at Jan 31 |
| ------------------- | --------------- | -------- | ------- | -------- | --- | -------- | ------------------- |
| Annual subscription | \$1,200.00      | \$101.92 | \$92.05 | \$101.92 | ... | \$101.92 | \$1,098.08          |

January and March each have 31 days, February 28, so their monthly figures differ slightly even though the daily rate is constant. The row sums to \$1,200.

## Relationship to other reports

* The current-period column matches the [Recognized Revenue report](/docs/guide/revenue-recognition/reports/recognized-revenue).
* The remaining amount matches the [Deferred Revenue report](/docs/guide/revenue-recognition/reports/deferred-revenue) for advance-billed sources.
* Line-level detail is in the [Journal Entry Details](/docs/guide/revenue-recognition/reports/journal-entry-details).

## Limitations to keep in mind

* The waterfall reflects what's been invoiced and recognized. It isn't a forecast of future bookings.
* Figures are pre-tax.
* Contra-revenue events (credit notes, voids) adjust the schedule in the period they occur.