Use case
SaaS revenue recognition with Lucius
Definition
SaaS revenue recognition is the process of recognising subscription and usage revenue over the period it is earned — under ASC 606 / IFRS 15 — from contract terms, rather than when cash is received.
Map your current workflow
Tell us how this process runs today and we'll show how Lucius keeps contracts, cash, and the ledger connected.
The problem
- Cash from annual prepayments arrives upfront, but revenue must be recognised over the contract term — creating deferred revenue that spreadsheets track manually.
- Upgrades, downgrades, mid-term amendments, and usage true-ups force constant re-computation of recognition schedules.
- Recognised revenue, deferred revenue, and AR drift apart from billing and cash, so board and investor metrics are reconstructed each close.
How Lucius solves it
- Lucius generates recognition schedules directly from contract terms and posts deferred and recognised revenue to the stateful ledger as invoices are issued and time passes.
- Amendments, upgrades, and usage true-ups update the schedule and post catch-up entries automatically, with an append-only trail.
- Deferred revenue waterfall, ARR/MRR, and the P&L all derive from the same maintained state in real time.
Workflow
- 1
Model the contract
Contract terms, performance obligations, and pricing are captured in Lucius.
- 2
Issue invoices on schedule
Billing and deferred revenue post together as invoices are issued.
- 3
Recognise over time
Revenue recognises on schedule or as usage occurs, posting to the ledger.
- 4
Handle amendments
Upgrades, downgrades, and true-ups update schedules with catch-up entries.
- 5
Report in real time
Deferred revenue waterfall, ARR, and P&L derive from maintained state.
Example data flow
| From | To | What happens |
|---|---|---|
| Contract | Recognition schedule | Lucius derives the recognition schedule from contract terms and obligations. |
| Invoice | Deferred revenue | Billing posts deferred revenue; recognition releases it over the term. |
| Amendment / usage | Catch-up entry | Changes update the schedule and post adjustments with an audit trail. |
Frequently asked questions
Does Lucius support ASC 606 and IFRS 15?
Yes. Lucius supports performance obligations, allocation, and recognition over time or at a point in time, derived from contract terms and posted to the stateful ledger.
How does Lucius handle deferred revenue for annual prepayments?
Billing posts deferred revenue when the invoice is issued, and recognition releases it across the contract term automatically — no spreadsheet schedule to maintain.
What happens to recognition when a contract is amended?
Lucius updates the recognition schedule and posts catch-up entries, keeping recognised and deferred revenue correct with an append-only trail.
Can Lucius recognise usage-based revenue?
Yes. Usage true-ups against contract pricing recognise on the correct schedule and tie back to the governing contract.
Map your current workflow
Tell us how this process runs today and we'll show how Lucius keeps contracts, cash, and the ledger connected.
Map your workflowOr explore the stateful ledger — Lucius's financial system of record.