The SaaS model makes it simple to get innovative software in the hands of users, and to keep it updated with the features they want. But SaaS accounting is anything but simple.
The revenue recognition rules for software sold by subscription are complex. Some contract elements can be recognized when you receive the payment, while others have to be spread over months or years.
It’s hard to tell if you’re making a profit since the cycles of cash payments don’t match the cycles of revenue recognition. If a customer pays a lump sum for their annual subscription, that has to be spread over the period of the subscription. But what if there are separate fees for set-up or training or customization?
We help SaaS companies sort out the rules for revenue recognition. Together with your CPA, we’ll help you set up procedures so your month-end closing is quick and easy, and eliminate all those error-prone manual calculations.
We’ll analyze your contracts so that you’re recognizing revenue correctly. You’ll know when you’re making a profit and when things need improvement.
Besides getting a handle on revenue recognition, we can help SaaS companies in these areas and more: