Discounts
Discounts reduce the transaction price according to ASC 606/IFRS 15 guidelines. Sequence supports two types of discounts with different recognition treatments.Product-level discounts
Product-level discounts appear as negative line items within an existing line item group. They’re netted against the product’s price and recognized using the same method and service period. Example: $1,200 annual subscription with 10% discount- Standard price: $1,200
- Discount: -$120 (within same line group)
- Net recognition: $1,080 over 12 months using straight-line method
Worked example: Annual subscription with product-level discount
Worked example: Annual subscription with product-level discount
Scenario
- Product: Annual subscription service
- Standard price: $1,200
- Product-level discount: 10% (-$120)
- Net amount: $1,080
- Billing: Annual in advance
- Service period: July 1, 2024 - June 30, 2025 (365 days)
- Recognition method: Straight-line
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On invoice date (July 1, 2024): Net amount deferred
- Journal: Debit Billed Revenue (+$1,080), Credit Deferred Revenue (+$1,080)
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Daily recognition: Revenue recognized based on actual days in each month
- Base daily amount: $2.96 per day ($1,080 ÷ 365 days)
- Most days: $2.90 recognized daily
- Month-end adjustments: $3.00 on final day to ensure monthly total of $90
- Example for May 2025: 30 days × $2.90 + 1 day × $3.00 = $90.00
Product-level discounts are netted against the product price and recognized using the same method and timing as the underlying product.
Invoice-level discounts
Invoice-level (global) discounts are separate line item groups with negative amounts. Sequence automatically allocates these discounts pro-rata across all invoice line items based on their standalone selling price. Example: $1,000 total invoice with $100 global discount- Line 1: $800 subscription (gets $80 discount allocation)
- Line 2: $200 setup fee (gets $20 discount allocation)
- Recognition: Each line recognizes its reduced amount using its own recognition method
Allocation is based on standalone selling price (SSP) - the transaction price of each line item - ensuring compliance with ASC 606/IFRS 15 standards.
Credit notes
Credit notes reverse previously recognized revenue. The exact behaviour depends on the credit note variant (invoice-attached, direct, schedule-correction, or standalone) and on the account-level revenue impact mode (cancellation or adjustment). See Credit notes for the full treatment with worked examples. Quick summary:- In cancellation mode (default), the credit note removes future obligations and reverses the deferred balance, before touching recognized revenue if needed.
- In adjustment mode, the original invoice continues recognizing as scheduled, and the credit note posts daily mirror entries that reallocate the reversal across the credit note’s service period.
One-time invoices
One-time invoices recognize revenue based on their service period and selected recognition method, with sensible defaults.Default behaviors
Single-day service period: Point-in-time recognition- Full amount recognized immediately
- Common for ad-hoc charges, refunds, or adjustments
- Revenue spread evenly over the service period
- Partial periods are prorated based on actual days over 365
- Common for project work or time-based services
Customizing invoice line items
You can override any defaults when editing the invoice:- Change recognition method per line item
- Adjust service periods independently
- Select different revenue classifications (arrears/advance)
Minimum fees and true-ups
When usage falls short of committed minimums, Sequence automatically generates true-up line items to ensure the minimum spend is met.True-up creation
When actual usage falls short of the committed minimum, Sequence automatically calculates and adds a true-up line item to meet the shortfall.Worked example: Usage-based billing with minimum fee true-up
Worked example: Usage-based billing with minimum fee true-up
Scenario
- Products: Two usage-based products (A and B)
- Monthly minimum: A$100.00
- Actual usage: A$20.00 (Product A only, Product B had no usage)
- True-up required: A$80.00
- Service period: May 2025
- Billing: Monthly in arrears (June invoice)
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During May: Usage tracked but not yet recognized
- Product A usage: A$20.00
- Product B usage: A$0.00
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End of May: Usage and true-up recognized simultaneously
- Usage recognition: Debit Unbilled Revenue (+A$20.00), Credit Recognized Revenue (+A$20.00)
- True-up recognition: Debit Unbilled Revenue (+A$80.00), Credit Recognized Revenue (+A$80.00)
- Total recognized: A$100.00 (meeting minimum requirement)
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On invoice date (June): All unbilled revenue becomes billed
- Invoice total: A$100.00 (A$20.00 usage + A$80.00 true-up)
- Journal: Debit Billed Revenue (+A$100.00), Credit Unbilled Revenue (-A$100.00)
True-up fees use point-in-time recognition because the service period has already been delivered, ensuring immediate recognition when the shortfall is identified.