Last year, Gartner forecast that more than 80% of software providers will change their business models from “traditional” perpetual license and maintenance, to subscription-based models. Software as a Subscription (SaaS) companies are on the rise. That means that many finance professionals will work with a SaaS business at some point in their career.
SaaS companies come with their own particular nuances. They often begin life as startups, and scale quickly. They either finance their own growth through efficient sales models, or secure rounds of funding to accelerate time to market. So their teams must be equally fast-moving with lean and efficient operations.
As a Finance professional within a SaaS business, you’re likely to need tools that make your work life easier and more efficient, and that save you time or money. Ideally both. And these solutions should grow with you as you build your teams, widen the services you offer, and enter new markets.
Whether you’re just starting your career in Finance for a SaaS company, or you’re up and running and looking to acquire more solutions on top of what you already use, this blog should help with the process of building your accounting tech toolbox.
What to look for in your SaaS accounting tools?
There are 8 key features to look for. These should help you decide if a new accounting tool is relevant for your SaaS business right now.
- 1. Able to scale
Your business might start small, but most SaaS companies are keen to transition quickly to the world of medium or large enterprises. It’s important to get your accounting products in place as early as possible. Avoid having to change systems and processes later, when you’ll have too much else to do, as well as new team members to onboard onto each solution.
- 2. Cloud-based
Cloud-based services are ideal for global businesses, which make up the vast majority of SaaS companies. Their costs are usually lower than companies that host your data locally. Your data will be secure, and you’ll have access to it whenever and wherever you need.
- 3. Easy to use
There’s no reason to make life harder for yourself. There are so many tools out there that have been built with ease of use in mind. Look for easy-to-use interfaces, designed to be accessible whatever your technical abilities.
- 4. Saves you money
Best-in-class Finance Managers are always looking for ways to reduce costs. Your accounting tools might help you do this. Look for services that offer financial savings compared with the processes you have in place already. For example, using CurrencyFair for your currency exchanges is eight times more cost-efficient than using your bank.
- 5. Saves you time
We all know that finance managers are busy. Your solutions should help you to do your work more quickly and efficiently. If you’re currently working with a clunky solution, that is not fit-for-purpose for a SaaS business, then perhaps you should consider investing elsewhere. Take a look at our recommendations later in this article.
- 6. Integrates with your other tools and systems
Point solutions are out there to solve your unique problem. For example, let’s say you need to perform revenue recognition on your recurring revenue. Until now, you’ve used cash-based financial statements for tax purposes, but your investors need more details on the economic viability of your business. You choose a revenue recognition software, but it doesn’t match up with your accounting solution. Now you’re wasting time going between the two systems. Look for tools that can easily integrate with your existing tools.
- 7. Can automate certain processes
Busy finance managers should consider further tapping into technology for automation purposes. By automating the easier or more manual tasks, such as expenses or payroll, you can focus on the challenges that require your full brain power. Automation won’t solve all your problems, but it might just save you a few hours on your working week.
- 8. 24/7 Customer support
If you run into an issue with your software, or need some help getting started, then you’ll want to know that there are customer service agents ready to help you and your teams. You should consider your language and market requirements - present and future. If you’re going to expand into China one day, will you need support in Chinese at some point? Gathering all your requirements at the start of your search will save you hassle down the line.
Which tools should I choose?
We’ve looked at some of the most popular finance tools for SaaS businesses, and compiled a short (and certainly not exhaustive) list below.
The accounting software
Xero is ideal for medium to large enterprises. It includes some fantastic accounting features, and ample reports. It’s great for growing businesses as it offers unlimited users and a tiered pricing system. Its user interface is modern and easy-to-use. Xero actually meets most criteria in our list above, and has a third-party integration marketplace that is second to none. In fact, our CurrencyFair Business solution integrates with Xero, and you’re able to take advantage of a 30 days’ free trial.
Sage Intacct is also cloud-based, and offers core accounting functionality as well as contract and subscription billing, and revenue recognition.
The currency exchange platform
Currency exchange platforms, such as CurrencyFair, allow you to keep full control over your international transfers and transactions. Our multi-user access feature is perfect for SaaS companies looking to scale. And using the two-step approval flow helps managers keep an overview of their exchanges, without having to do all the work themselves. Our world-class support is available 24/7, and you get access to a dedicated account manager who will fast track your account set up, and provide a helping hand throughout.
We’re also 100% transparent in terms of fees and costs, so you have a good handle on what’s going out and coming in. And we offer excellent value for money when compared with banks, who typically charge eight times more per transfer. That’s good news for your cash flow. Not to mention your investment pitches.
The bolt-on subscription management platforms
Point solutions help you solve one particular problem, or implement a new service, quickly. And they allow you to build an ideal tech stack for your accounting team.
For example, SaaSOptics and Ordway are cloud-based subscription management platforms that automate financial operations for B2B SaaS businesses. You can pull accurate SaaS metrics and analytics quickly, manage billing and payments smoothly and automate compliant revenue recognition.
Solutions such as Chargebee and Chargify also help fast-growing businesses by taking the pain out of subscription billing. They allow you to effectively handle your trial users’ accounts, bill based on usage, and manage other complex pricing requirements that are unique to a SaaS accounting model.
The expenses software
If your accounting software doesn’t do it, or you’re not happy with how it works, tools like Expensify are great for managing expenses. It allows employees to easily track receipts and manage expenses on the go. Features such as corporate card reconciliation and multi-level approval workflows save you time that you can better spend elsewhere.
You could also consider Pleo, the business payment card solution that automates expense reports and simplifies spending. Assign physical or virtual payment cards to your employees and contractors, and manage each individual’s spending limits.
Solutions like Pleo and Expensify allow you to access company spending in real-time, and sync everything with your accounting system. That means you’ll always have a real-time overview of money going out of your accounts.
There’s no “one-size-fits-all”
These accounting tools are some of the most highly regarded in the industry, but you will need to build your own toolbox based on your organization’s particular needs and growth plans. Your first step should be to assess the state of your current accounting processes and tools. Do you need improved processes and/or technology right now? Once you’ve done that, you’re able to map your business’s plans against your current accounting tech stack. Find out what you are missing. Or where you might struggle with platform integration. Speak to your industry peers as well as vendors, and start to build your own criteria for each type of solution.