Regardless of business model, accurate books are fundamental to growing your SaaS company. Not only do your books provide visibility into your runway and profitability, but they’re also essential for generating the financial reports and metrics that are key to potential investors.
A proper small business accounting system is the only way to keep control over important SaaS bookkeeping tasks like:
- Expense management
- Subscription billing and sales tax filing
- Revenue tracking and cash flow management
Unfortunately - in an effort to preserve headcount and avoid hiring costs - many SaaS small business owners neglect their bookkeeping outright or waste valuable time trying to manage it themselves.
If you’re a SaaS founder, CEO, or controller looking to streamline your company’s workflow, you should know that dedicated accounting tools for SaaS companies can help automate your bookkeeping processes, increase efficiency, and ultimately improve your operating margin.
Here are 8 top accounting apps, software, and tools that are worth checking out.
Cloud-based accounting software
Compared with using spreadsheets to do your bookkeeping, cloud-based accounting software is faster, more accurate, and significantly more convenient – especially when it comes to:
- Subscription billing and invoicing
- Tracking and reporting MRR (Monthly Recurring Revenue)
- Forecasting cash flow
Cloud accounting software lets you access your accounts from anywhere. And because it provides two-way data synchronization through seamless integration with other bookkeeping tools, it can serve as the single source for all your financial data.
1. QuickBooks Online
QBO beats out Xero for many users by providing:
- An automated recurring transactions function
- Better sales tax management and report customization
- Time tracking and unlimited transactions with all their plans
Xero, on the other hand, offers:
- Robust user permissions
- More third-party app integrations
- Better customer service
Whichever software you choose, you’ll be happy to know that QBO and Xero offer similar accounting functionality and features, along with tiered pricing plans to scale with your business.
Expense management tools
While manually tracking and entering receipts and invoices can be time-consuming, leaving it undone means constantly playing catch-up with your books - and never knowing for certain what your liabilities or cash flow actually look like.
The good news is that expense management is easily automated with accounting tools for SaaS companies that track expenses and speed up the monthly reconciliation process.
3. Dext Prepare (formerly ReceiptBank)
Easily integrated with QBO or Xero, Dext Prepare streamlines expense management by:
- Letting you take photos of your receipts or invoices, and then extracting and exporting the key data to your cloud accounting software as a transaction
- Importing bills directly from utilities, telecoms, and other vendors
- Storing your photos in the cloud so they’re easily retrievable as source documents in the event of an audit
Similar to Dext Prepare in terms of extracting and exporting data from receipt photos, Expensify offers additional benefits that include:
- Enhanced management capabilities across your employee expense process (from approvals to reimbursements)
- Direct receipt integrations with specific hotels, ridesharing companies, and parking establishments
Expensify is especially helpful for controlling costs and ensuring your team adheres to a budget.
Automated payment platforms
Automating outgoing and incoming payments (and the reconciliations that go along with them) is a great way to speed up your accounts payable and receivable functions, improve cash flow management, and ensure you never miss a payment.
After importing each of your bills from QBO or Xero, Plooto will:
- Get online approval from your company’s authorized personnel
- Pay the bill from your bank account
- Reconcile the payment in your accounting software
With Plooto, you can perform cheque-based or EFT payments, pay international vendors, customize your payment approvals, and set rules to automatically approve recurring payments.
Rotessa is an online platform that lets you withdraw payments directly from your customers’ bank accounts through PAD (Pre-Authorized Debit in Canada) or ACH (Automated Clearing House in the US).
Rotessa connects with your accounting software to:
- Detect outstanding invoices
- Schedule customer withdrawal transactions based on invoice due dates
- Reconcile customer payments in your accounts receivable
Rotessa is especially helpful for subscription accounting because you can schedule recurring customer payments and avoid paying credit card fees (rather than a percentage, pre-authorized debit processors charge a flat rate per transaction).
Plus, if your SaaS business takes on longer-term projects, you can also schedule customer payments around one-time fees or charges.
Another popular payment processing platform, Stripe is especially convenient when you want to collect customer payments via credit card.
Subscription management platforms
Many SaaS companies resort to using spreadsheets to manually track and then update deferred revenue in their accounting software.
You can save time and improve accuracy, however, by using a B2B subscription management platform like Chargebee to handle every aspect of your subscription lifecycle, including:
- Recurring billing
- Customer invoicing
- Free trial offer management
Chargebee integrates with either QBO or Xero to sync customer invoices, payments, credit notes, refunds, and taxes. It offers a full suite of reporting options – from standard financial statements, to deferred revenue and tax liability reports – and even lets you file returns to specific tax authorities.
Other subscription management platforms you may want to consider include Chargify and SaaSOptics.
Remember, while manual, spreadsheet-based bookkeeping is slow and prone to errors, dedicated accounting tools for SaaS companies can:
- Reduce the time you spend on your books
- Improve data accuracy, whether you’re fundraising or applying for SR&ED tax credits
- Put timely cash flow information in the palm of your hand to help you stay afloat over the long run
Even with tech-driven solutions like these, however, you need someone who understands SaaS accounting to manage your process.
At Enkel, we can help implement your accountancy tools while managing your day-to-day bookkeeping. And if you need a part-time financial controller to assist with budgeting or cash flow forecasting, our team of experienced bookkeepers can also help.