SaaS Accounting

Accounting and tax advice for SaaS companies

Accounting for SaaS companies is different from other software businesses because ‘software as a service’ is built around a recurring subscription model. Your success depends on signing up clients and getting them to stick with your software product or service.

As a result, an important part of accounting for SaaS businesses is monitoring performance against subscription-related key performance indicators (KPIs), such as average revenue per client (ARPC) and churn.

SaaS company accountants also need to put together robust systems and processes for managing subscriptions. You need to charge people the moment they subscribe, at the right rate, taking into account any discounts or add-ons. Subscription fees need to adjust automatically when they upgrade or downgrade their account. Billing needs to be automated and overdue or missing payments need to be flagged for action. And, of course, you need to stop charging clients when their software subscription ends. We can help you manage all of this using cloud accounting software as the core of your billing system, integrated with client or subscriptions management software.

Beyond those special requirements, SaaS companies also need support in complying with HMRC and Companies House regulations. They need to maintain accurate financial records, file annual accounts and complete a corporation tax return. From bookkeeping that takes into account your subscription model, to payroll services, to VAT, we can take care of all those day-to-day financial administration jobs on your behalf.

When it comes to growth advice for SaaS companies, our management accounting and business planning services are ideal. We’ll give you and your management team the information and commentary you need to make smart decisions, in detailed monthly or quarterly reports. Those reports, along with financial forecasts, will also feed into long-term business plans which will help convince grant-awarding bodies, lenders and investors to provide the capital your SaaS business needs to expand.