Credit notes
A credit note reduces what a customer owes you, either as a refund or as credit toward future invoices. Lago recognizes the reduction (the contra-revenue) when the credit note is issued, and splits out the tax portion separately. A customer was invoiced $1,000 (pre-tax) on January 1 and the revenue is being recognized across January. On January 20 you issue a $300 credit note.
If the credit note is refunded in cash, the cash leaves when the refund actually settles. If it’s applied as credit toward future invoices, it sits as a credit balance the customer can draw down later.
Voids
Voiding an invoice cancels it entirely, even months after it was issued or paid. Lago reverses the recognized revenue and the tax tied to that invoice, as contra-revenue, on the void date. The reversal lands in the current period, not the original one.Coupons
A coupon is a discount applied at invoicing, before tax. It reduces the revenue recognized from that invoice. The customer was never going to pay the discounted portion, so it’s never recognized as revenue.Manual adjustments
Editing a fee on a draft invoice changes the amount that will be recognized. The difference is treated as an adjustment to revenue. Once the invoice is finalized, the recognized amount follows the final fee.What this means for your reports
- Contra-revenue events show as negative amounts in the Recognized Revenue report for the period they occur.
- They appear as distinct lines in the Journal Entry Details, so you can trace every reduction back to its credit note, void, or coupon.
- Recognized revenue earned in earlier, closed periods is never restated. The reversal is always booked in the current period.