Overview

Sequence’s Revenue Recognition module lets you accurately track the revenue you earn as you deliver services to your customers. Its primary output is a monthly journal report that details the revenue you earned in that month, vs what you billed your customers (e.g. for services that you will deliver or have delivered in other months).

You can customize the granularity and format of these reports to align with your accounting conventions, which makes it easy to integrate Sequence-generated journals into your general ledger at month end.

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What is revenue recognition

Revenue recognition is a set of accounting practices aimed at accurately reporting the revenue that a business is generating over time.

Generally accepted accounting principles (GAAP) and accounting standards such as ASC 606 and IFRS 15 hinge on the idea that revenue must be recognized at the time it is earned, that is when a contracted service is delivered to the customer, as opposed to when an invoice is issued or cash is received.

These guidelines are a legal requirement for public companies and other entities above certain sizes, but apply broadly for any business who enters into contract with their customers, and are critical to forming a reliable picture of a company’s financial health and trajectory.