SaaS Accountant
Due to the ever-changing way businesses operate in recent years, we have seen a surge in the SaaS economy. This means that the way accountants deal with businesses has evolved too.
A SaaS accountant can help you manage and track SaaS metrics, such as the cash flow going in and out of your business. This allows you to focus on other things, giving you total peace of mind that a professional has your business’ finances under control.
Accounting for SaaS could be considered essential due to the nature of the business and the way cash comes in, as this is not like other business models. Get yourself a SaaS accountant and start feeling the benefits today.
What Is SaaS Accounting?
Software-as-a-service (SaaS software) Accounting refers to the recording and analysis of financial data. This type of accounting service is for businesses that operate as software-as-a-service.
The accounting type for this business model includes taking into account the recurring revenue that is gained from a subscription-type business model. Therefore, providing financial statements, regulated and identified by the International Financial Accounting Standards Board (FASB), International Financial Reporting Standards, etc., is specific to these kinds of businesses.
It is with these types of businesses that financial data has to be interpreted due to the complexity of accounting for SaaS businesses.
With SaaS accounting, data is securely accessed through the internet on multiple devices through the cloud. This is due to the fact that SaaS accounting software allows users to connect to cloud-based apps through the internet too.
Common SaaS examples include email and office tools such as Microsoft Office. Most SaaS companies, therefore, leverage cloud accounting to manage their finances and business reports.
SaaS Accounting Methods
Accounting for SaaS businesses is complex, so having an accountant can benefit you.
Cash and Accrual Accounting
Cash accounting counts revenue and expenses whenever cash is received or paid. It is essentially on cash basis accounting, and most startups use this method, which is easy to use and maintain.
It is recommended for smaller businesses, but not for SaaS businesses. Accrual accounting, on the other hand, does not count revenue until it is earned, regardless of when the cash actually comes into the business. This method can be more complicated, but it is better for SaaS businesses with a subscription-based income.
Accrual accounting is also more popular with larger or growing organisations, despite its complicated nature.
If you have a SaaS business, you will find that investors or even government regulators may require you to have accrual accounting, so get ahead with your SaaS accountant today.
GAAP-Compliant Financial Management
GAAP stands for Generally Accepted Accounting Principles and is a set of accounting guidelines, rules, and regulations.
This helps to standardise methods for business accounting and eliminate any variations across industries.
GAAP requires organisation, consistency, and comparable financials. A SaaS accountant can take care of everything so that you do not have to. All of your data will be accurate and reliable with an accountant for your SaaS business.
SaaS Specific Financial Reporting
Your SaaS business should generate the following data at least monthly:
Profit and Loss Statements or Income Statements
This will summarise the revenue, costs, and expenses of your business over a period of time.
Balance Sheet
Gives a snapshot of a company’s assets and liabilities, as well as equity and things that the company owns.
Cash Flow Statement
This is for showing the ins and outs of cash flow in the business.
Bookings
Expect to paint a picture of what you expect to earn over a period of time. This is because your bookings as a SaaS business are the total amount that customers have committed to paying for subscriptions or other services that you offer (deferred revenue).
You may have to factor in the length and revenue from contracts with customers. This will help to show the success of your SaaS businesses.
Billing
These are what are billed to your customers, and show the actual amount you plan on collecting from them.
Revenue
Recording revenue is essential to showing a business’ earnings and profit. SaaS revenue recognition can be difficult to measure due to the nature of the business. For example, with subscriptions, some customers can pay upfront for a year and not count the entire payment as profit yet. The money will only be counted as your customers consume your service as each month goes by.
SaaS Accountant Benefits
Having a SaaS accountant provides many benefits to your company.
Boost Productivity
It can boost productivity, help you make better decisions, and help you focus on your business and work on propelling it forward.
A cloud-based company needs cloud-based accounting services to speed up your team’s efficiency.
Flexibility
Future-proof your accounting with a SaaS accountant for your business. This way, it gives you the ability and freedom to adapt. Access your accounts from anywhere with SaaS accounting.
Security
Online means fantastic security and upgrades that will be continually upgraded for you. Keep your data safe and secure, and protect your financial data.
Real-Time Financial Data
Access your data at any time and have it accurate at that time. This helps you make timely decisions about your business.
DH Business Support Can Help
At DH Business Support, we can help you and your SaaS business. We are more than just accountants here; we can free you from the business financial admin so you can enjoy being a SaaS business owner.
We will always be on hand whenever you need us, giving you our support and helping you succeed. The excellent planning that we provide will help you in your SaaS business. By always taking the time to understand the goals of the business, we can help you succeed.
DH Business Support will ensure that you are all set up with your SaaS accounting systems. This is essential for any business and will help you succeed while obtaining the maximum benefit.
We reshape the way people think about their accounting needs at DH Business Support. Be free from any of your accounting chores, including taxes and other admin tasks. Join us today and focus your efforts elsewhere in your business. Let us help you reach the potential of your business, wherever you may be based.
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