> ## Documentation Index > Fetch the complete documentation index at: https://docs.sequencehq.com/llms.txt > Use this file to discover all available pages before exploring further. # Use-cases > Handle discounts, credit notes, one-time invoices, and minimum fees Revenue recognition handles complex billing scenarios automatically. This guide covers discounts, credit notes, one-time invoices, and minimum fees. ## 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 **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 **Revenue recognition pattern**: * **On invoice date** (July 1, 2024): Net amount deferred * Journal: Debit Billed Revenue (+\$1,080), Credit Deferred Revenue (+\$1,080) * **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 discount worked example 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. This allocation happens automatically on the invoice date, so each line item's revenue schedule reflects the discounted amount. ## 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](/revenue-recognition/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 **Multi-day service period**: Straight-line recognition * 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. **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) **Revenue recognition pattern**: * **During May**: Usage tracked but not yet recognized * Product A usage: A\$20.00 * Product B usage: A\$0.00 * **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) * **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. ## Credit grants Prepaid credit grants reduce recognized revenue as they're consumed against invoices, so the same revenue isn't recognized twice. See [Credit grants](/revenue-recognition/credit-grants) for the model, examples, and limitations.