SaaSOptics Blog

Why It's Better to Scale Your Financial Operations Without Spreadsheets

[fa icon="calendar'] May 8, 2018 3:57:11 PM / by Clayton Whitfield posted in Spreadsheets, Data Integrity, Financial Operations, SaaSBusiness

[fa icon="comment"] 0 Comments

Sometimes in life, making ends meet is the only option. We’ve all faced situations where doing the thing that is “good enough for now” is the only option. Managing the financial operations of your SaaS business shouldn’t be one of those times.

In their early days, most recurring revenue businesses manage financial operations with spreadsheets. Instead of robust finance systems that are expensive, they create homegrown SaaS financial operations by cobbling spreadsheets together with traditional accounting software. And while that may be good enough when a business is in its infancy, it will create a great deal of chaos, overhead and problems down the road. 

Financial Operations that Scale

If you are managing your SaaS finances with spreadsheets, it’s not too late, but it’s important to put a plan in place for reliable financial operations that will serve your business now and in the years to come.

Here’s why.

Read More [fa icon="long-arrow-right"]

SaaS Revenue Recognition Challenges with QuickBooks (And What You Can Do About It)

[fa icon="calendar'] Apr 25, 2018 12:21:12 PM / by Clayton Whitfield posted in Financial Operations, QuickBooks, Revenue Recognition

[fa icon="comment"] 0 Comments

QuickBooks is an easy decision for a SaaS startup or SMB. However, subscription-based businesses quickly run into challenges. QuickBooks does many things well, but it doesn’t efficiently manage subscription revenue recognition or subscription billing, especially if you have sales-negotiated behavior in your contracts, which is the heart of financial operations for a SaaS business and is required by ASC 606 and GAAP compliance.

That’s why SaaS companies augment QuickBooks with spreadsheets. We’ve seen it all when it comes to revenue recognition spreadsheets they’re complicated and error-prone.

There’s a reason revenue recognition gets complicated with subscription businesses

Subscription-based businesses can’t fully recognize revenue from a contract until they’ve delivered the agreed-upon services. But with varying contract lengths, sometimes bundled services and the occasional non-standard service, SaaS businesses need the flexibility to recognize revenue in a manner consistent with their agreements. In B2B SaaS, this might mean a combination of amortizing revenue over the term or recognizing it based on completing certain contractual milestones.

Read More [fa icon="long-arrow-right"]

MRR vs. ARR

[fa icon="calendar'] May 11, 2017 9:47:50 AM / by Clayton Whitfield posted in MRR, Investors, Financial Operations, ARR

[fa icon="comment"] 0 Comments

Answers to Common Questions about MRR and ARR

MRR is the most popular method of normalizing recurring revenues for subscription analytics. Normalized revenue provides a clearer picture of performance, especially when reported in categories relative to prior periods.

So, what's up with the less-talked-about cousin, ARR? Are there any real differences, other than the obvious? Why use ARR vs. MRR in your business? How will bankers and VCs react to ARR vs MRR?

Read More [fa icon="long-arrow-right"]

3 Ways Spreadsheets Devalue Your SaaS Business

[fa icon="calendar'] Jan 3, 2017 12:55:34 PM / by Clayton Whitfield posted in Spreadsheets, Data Integrity, Financial Operations, Data

[fa icon="comment"] 0 Comments

To paraphrase Chris Rock, "you can drive a car with your feet, but that doesn’t make it a good idea."

Read More [fa icon="long-arrow-right"]