10 Best Accounting Software for SaaS Companies (Businesses)

For many years, the computer revolution that permeated all sizes of firms left finance and accounting departments behind. But those were different times. Avoid becoming sucked into time-consuming manual operations. For your job to have greater strategic value, use innovative SaaS accounting software.

Software-as-a-Service (SaaS) organizations are seeing growth in their accounting complexity in tandem with their business. SaaS companies face particular financial challenges, such as managing recurring billing, tracking revenue recognition, handling several currencies, and adhering to regulatory standards such as ASC 606 and IFRS 15. Many people speed up these processes by using specialized accounting software. We’ll explore the top accounting software choices for SaaS companies in 2024 in this article.

Accounting Software’s Advantages for SaaS Companies

Businesses that provide software as a service, or SaaS, operate in a distinct financial environment that includes subscription billing, recurring revenue models, and compliance requirements such as IFRS 15 and ASC 606. The financial complexity of these businesses grows as they grow, rendering manual accounting and general accounting software ineffective and prone to errors. SaaS firms may benefit from specialized accounting software in a number of ways, including process optimization and enhanced financial stability. The following is a summary of the main advantages of accounting software for SaaS companies:

1. Automates Recurring Billing

SaaS companies rely heavily on subscription models for recurring income. Manually handling recurring billing, particularly when there are several price levels, discounts, and add-ons, may be laborious and prone to mistakes. This procedure is automated by accounting software, guaranteeing that clients receive correct and timely bills.

2. Ensures Revenue Recognition Compliance

For SaaS companies, revenue recognition is an essential component of financial reporting. According to guidelines like IFRS 15 and ASC 606, revenue must be recorded as soon as it is earned rather than as soon as payment is received. SaaS-specific accounting software ensures that the company complies with regulatory standards without the need for manual intervention by automating revenue recognition based on contracts, milestones, or service delivery.

3. Enhances Management of Cash Flow

SaaS firms depend heavily on cash flow, particularly in their expansion stages. Accounting software gives you instant access to information on the financial flow of your company, making it easier to keep track of your income and spending.

4. Improves Analytics and Financial Reports

SaaS companies need accurate and analytical financial reporting in order to monitor performance, draw in investors, and make strategic business choices. With the help of configurable dashboards and reports, accounting software offers real-time access to crucial indicators including profitability, churn rate, customer lifetime value, and monthly recurring revenue (MRR).

5. Simplifies multi-currency Transactions and Tax Compliance

SaaS firms frequently deal with several currencies, tax laws, and international regulations while operating in many areas. Accounting software facilitates the management of transactions involving several currencies and computes all applicable taxes, including sales tax, GST, and VAT, automatically.

6. Lowers Human Errors and Boosts Productivity

Errors can occur in manual accounting procedures, particularly when handling high transaction volumes, intricate billing schemes, or a large number of clients. Software automation of accounting procedures lowers the possibility of human mistake in the form of duplicate entries, improper data entry, and computation errors. Moreover, it expedites revenue recognition, cost monitoring, and invoicing; giving finance teams more time to work on strategic projects rather than tedious accounting.

7. Promotes Scalability

SaaS firms’ financial procedures get increasingly complicated as they expand. Scalable accounting technologies are necessary to manage more customers, more revenue streams, and more pricing models.

8. Enhances Teamwork throughout Departments

Accounting software promotes cooperation by giving several departments (finance, sales, and marketing) a single platform to access pertinent financial information. Teams may now collaborate more effectively when creating budgets, projecting income, and examining important financial data.

9. Facilitates Auditing and Compliance

Accounting software helps SaaS companies keep accurate records, securely store financial data, and guarantee that every financial activity can be tracked down. Having automated and well-organized records guarantees that companies can give current and correct information with the least amount of disturbance during audits and compliance inspections.

10. Connects with Additional Business Instruments

Numerous more technologies, including project management software, CRM systems, and payment gateways, are frequently used by SaaS companies. By integrating with these instruments, contemporary accounting software facilitates data interchange and minimizes the need for human data entry.

11. Enables Stakeholder and Investor Reporting

In order to evaluate a company’s financial stability and prospects for expansion, investors and stakeholders require precise and comprehensive reports. Financial reports that may be customized by accounting software show important data including profitability, churn rates, client lifetime value, and acquisition expenses.

11 Top Accounting Software & Tools for SaaS Companies

To meet their demands beyond financial reporting, SaaS companies must choose the finest accounting software. The SaaS accounting program listed below satisfies those needs.

1. XERO

One of the most well-liked cloud-based accounting systems, Xero is perfect for small to medium-sized SaaS companies. It is favored by company owners because to its user-friendly design, many integration possibilities, and powerful reporting features.

In 2006, Xero was established in New Zealand. Rod Drury, the company’s founder, realized that accounting software needed to be updated. They quickly expanded from a modest business with a few customers to a big business with over 1,400 staff members. They took home the prize in the Cloudshare Awards’ Best Accounting Software category in January 2015. According to numerous reviews, Xero has a tone of features that other accounting software packages do not.

Important Characteristics:

• Support for Subscription Billing: To enable subscription-based billing, Xero connects with other applications like Chargebee or Stripe.
• Support for many currencies is a helpful feature for SaaS companies who serve clients abroad.
• Inventory Management: Easily track goods, services, and inventory.
• Customization: For in-depth financial reports, very customizable

Pricing

The $25 monthly cost of the entry-level choice. If the payroll option is not necessary for you, the mid-range option is fantastic. Get a nice package for $50 per month. However, if you do require payroll and multi-currency, the premium option begins at $60 for 5 payroll-related staff. Up to 100 payroll employees are covered for $100; beyond that, each additional employee is $2.

Pros:

• Easily navigable and suitable even for beginners
• Reasonably priced for small enterprises
• Robust third-party integration ecosystem

Cons:

• Comprehensive revenue recognition and other advanced capabilities require add-ons.
• Limited in-person assistance for intricate subscription billing

2. NetSuite

One of the greatest options for SaaS organizations in need of enterprise-level accounting and financial management software is NetSuite. It is an all-in-one cloud solution from Oracle that provides integrated ERP functionality and strong financial management.

Important Characteristics:

• Advanced Subscription Management: Manages renewals, downgrades, upgrades, and billing directly.
• Revenue Recognition Automation: Using automated recognition procedures, it guarantees adherence to IFRS 15 and ASC 606 compliance.
• Consolidated financial reporting is ideal for SaaS businesses that deal with many currencies and geographical locations.
• Complete connection between CRM and ERP modules is provided by ERP integration, which aids in resource allocation and customer service.

Advantages:

• Full-featured and expandable solution for medium-to-large enterprises
• Robust automation solutions that save time spent on financial tasks
• ERP capability that is integrated for complete business management

Cons:

• High cost, which prevents small enterprises from using it
• Longer learning curve and complicated setup

3. Sage Intacct

Another premium choice that targets SaaS firms directly is Sage Intacct, which offers sophisticated financial reporting and automation features. It works especially effectively for large-scale or quickly expanding SaaS companies that require cutting-edge features.

Important Characteristics:

• Billing for Subscriptions and Managing Contracts: specifically designed with flexible invoicing and pricing options for recurring income structures.
• Concealed revenue recognition Complies with IFRS 15 and ASC 606, which facilitates revenue recognition based on client contracts.
• Project Accounting: Perfect for service-based software as a service firms, this allows you to easily manage and monitor many projects.
• AI-driven insights Make data-driven choices, estimate revenue, and manage cash flow with the use of predictive analytics.

Advantages:

• Features unique to the industry and catered to SaaS companies
• Robust reporting and customizable dashboards
• very scalable and with superior auditing abilities

Cons:

• Exorbitant implementation expenses
• Ideal for medium-to-large SaaS companies

4. Chargebee

Even though Chargebee isn’t a standard accounting program, it’s crucial for SaaS businesses handling intricate subscription payments. For handling billing activities, it connects easily with accounting platforms such as Xero, QuickBooks, and NetSuite.

Important characteristics:

• Management of Recurring Billing: Automates renewals, downgrades, upgrades, and invoicing for subscriptions.
• Revenue Recognition: By monitoring deferred revenue, it guarantees revenue compliance.
• Monitoring SaaS metrics: Offers up-to-date information on client lifetime value, attrition, and MRR (monthly recurring revenue).
• Support for Several Currencies: Ideal for international SaaS companies with operations across borders.

Pros:

• Streamlines revenue recognition and subscription billing
• Lessens the need for manual accounting procedures for ongoing income
• Facilitates the incorporation of major accounting systems

Cons:

• Requires accounting software in order to function as a stand-alone accounting system.
• Restricted features not available without a subscription

5. QuickBooks Online

One of the most well-known brands of accounting software is QuickBooks. QuickBooks Online, the cloud-based version, provides a complete solution for SaaS companies, especially small and medium-sized ones.

Important characteristics:

• Revenue Recognition Tracking: Complies with ASC 606 and other regulations by automating complicated revenue recognition procedures.
• Integration for Subscription Billing: Easily links to recurrent billing platforms like as Chargebee, Stripe, and Recurly.
• Reports that can be Customized: Monitor critical financial data, costs, revenue, and sales in real-time.
• Multi-user Collaboration: With adjustable permission levels, several team members can log in to the system at once.

Pros:

• Easy to use and requires little background in accounting
• Scales well for small- to medium-sized SaaS enterprises
• Complete interfaces with industry-standard programs such as Salesforce

Cons:

• Restricted scalability in relation to enterprises
• The advanced feature learning curve

6. Tipalti

Tipalti offers integrated add-on software for AP Automation, Mass Payments, Expenses, and Procurement that works with the accounting or ERP system of your business. Tipalti utilizes a variety of ERP systems. Tipalti is a scalable cloud-first software solution that supports present-day objectives and forward-thinking plans for SaaS organizations as well as enterprises in other sectors.

Key Features:

• Self-service supplier on boarding using an internet portal to gather data for W-9 or W-8 forms and payment method details.
• Supplier certification and payments monitoring for 1099 tax compliance
• Simplify the processing of invoices with automation, using guided approvals.
• Global regulatory compliance that is automated
• Real-time reconciliation of payments
• Payments in 196 nations with 120 local currencies and payment options that are accessible in each country

Pros:

• Accepts a number of payment options, including PayPal, wire transfers, ACH, and more.
• Integrated fraud detection and risk management systems to guard against mistakes in finances and fraudulent transactions.
• It is perfect for multinational enterprises since it can process payments in over 120 currencies and 196 countries.

Cons:

• For newer companies or smaller enterprises with tighter resources, the cost might be exorbitant.
• The initial setup, particularly for smaller teams, can be difficult and time-consuming.

7. Maxio

Leading SaaS business software vendor is Maxio. SaaSOptics and Chargify were integrated by Maxio to produce feature-rich SaaS software that can manage price innovation, such as multi-attribute pricing models, metered use, and user usage.

Main Attributes:

• Organizing a catalogue to combine several clients into a customized pricing plan
• Timely Renewals
• Accept all forms of payment from clients.
• SaaS measurements
• Upgrading, decreasing, or prorating subscription fees
• Managing intricate pricing models
• Recurring payments using personalized invoice formats

Pros:

• Specifically created for SaaS companies, it provides powerful capabilities for invoicing and subscription administration.
• For SaaS organizations, automated revenue recognition guarantees compliance with IFRS 15 and ASC 606 regulations.
• Supports data-driven decision-making by offering comprehensive SaaS indicators including MRR, attrition rate, and client lifetime value.
• With features that facilitate scaling up, it is appropriate for both newly founded and expanding SaaS companies.

Cons:

• For startups or smaller companies with fewer resources, it can be costly.
• Certain users have expressed concerns over the restricted customization options for intricate use cases.

8. BillingPlatform

Software for quotation to cash automation is called BillingPlatform. It manages subscription billing models for SaaS enterprises and serves other businesses that have the option to charge for subscriptions in addition to one-time product purchases. Tipalti, a SaaS business, chose BillingPlatform as their corporate billing automation software supplier.

Key Elements:

• Manages intricate billing models for recurring subscriptions based on use, subscription fees, hybrid, and other innovative pricing techniques.
• Recognizing revenue
• Acceptance of customer payment
• Security up to enterprise standards

Pros:

• Scalable: Able to grow to accommodate companies of all sizes, from small to medium-sized firms to major corporations.
• Multi-Currency & Global Billing: Offers taxes, compliance, and multi-currency tools to facilitate worldwide billing.
• Revenue Recognition: Ensuring compliance with IFRS 15 and ASC 606, revenue recognition is automated.
• Real-Time Reporting: Offers firms up-to-date financial performance and important billing indicators through real-time analytics and reporting.

Cons:

• Complicated Setup: Due to the platform’s high degree of customization, the initial setup and configuration may be difficult and time-consuming.
• Expensive: Compared to alternative billing platforms, pricing may be expensive, especially for small firms or startups.

9. Zuora

Leading subscription management and billing software, Zuora was created especially for companies with recurring or subscription-based revenue models. It assists businesses in handling all aspects of their subscription operations, including invoicing, revenue recognition, pricing, and analytics. Media, entertainment, SaaS firms, and other sectors that depend on recurring subscription models utilize Zuora extensively. Businesses of various sizes turn to the platform because of its scalability and adaptability, especially those with intricate billing systems or international operations.

Main Features:

• Subscription Billing and Management: Companies may design and oversee recurring, usage-based, one-time, or hybrid billing models with Zuora’s support for complicated billing cycles. Users may manage mid-cycle adjustments, automate invoicing procedures, and modify prices as necessary.
• Multi-Currency & Taxation: With built-in support for numerous currencies, worldwide tax regulations, and compliance with local tax laws, this feature enables organizations to manage subscriptions globally.
• It provides customer relationship management technologies that let businesses monitor and maximize every stage of the subscription lifecycle, including upgrades, downgrades, cancellations, and renewals.
• Versatile price & Packaging: Zuora provides versatility in establishing many price models, such as usage-based, volume-based, and tiered pricing. Businesses may quickly test out new promotions, discounts, and bundles.

Pros:

• SaaS-focused: Designed with subscription-based enterprises in mind, this platform provides extensive functionality for billing, invoicing, and subscription administration.
• Revenue Recording: This system guarantees adherence to IFRS 15 and ASC 606 by automating the recording of revenue.
• Scalable: Capable of growing with your company as it does, this platform is appropriate for companies of all sizes, from startups to major corporations.

Cons:

• It might be expensive for new businesses or smaller, less resource-rich firms.
• It might take a while to set up initially, particularly for companies with very precise invoicing requirements.
• Mostly geared towards subscription-based enterprises, thus it might not be the best choice for organizations with straightforward or one-time payment requirements.

10. Recurly

Recurly is a platform for managing subscriptions that helps organizations optimize recurring income, automate invoicing, and manage subscriptions. Media outlets, SaaS firms, and subscription-based enterprises are the main markets for it. Recurly offers flexibility for a range of price structures while streamlining the intricacies of revenue recognition and subscription invoicing. Due to its reputation for being simple to integrate with company systems and payment gateways, businesses of all sizes have come to rely on it as a solution.

Main Features:

• Supported pricing mechanisms for subscription management include recurring, one-time, usage-based, and hybrid.
• Automated Billing: Takes care of billing, collecting payments, and managing dunning all on its own.
• Revenue Recognition: This conforms to both IFRS 15 and ASC 606 requirements.
• Dunning Management: Lowers turnover by automating unsuccessful payment recovery.
• Analytics & Reporting: Offers important subscription data such as MRR, CLTV, and churn rate.
• Accepts a variety of payment methods, including international payment gateways, PayPal, ACH, Apple Pay, and credit cards.
• PCI Compliance: PCI-DSS Level 1 compliance guarantees data security.

Pros:

• Makes managing different pricing methods and plan modifications easier.
• A successful dunning procedure lowers turnover and payment failures.
• Capabilities for international payments and multicurrency for worldwide enterprises.
• Offers comprehensive data for monitoring the performance of subscriptions.

Cons:

• Maybe too rigid for really intricate or specialized workflows.
• Expenses can mount quickly, particularly for new businesses or those with modest transaction volumes.
• Not as strong in terms of advanced revenue recognition as competitors

Conclusion

Core accounting software and ERP systems that can handle revenue recognition or integrate with third-party add-on software to offer these functionalities are examples of accounting software for SaaS enterprises. You may increase productivity, cash flow, and profitability in your business by using an accounting solution for SaaS enterprises. Software for automating the payment of suppliers to SaaS organizations, revenue recognition, recurring billing, and SaaS analytics are a few instances of integrated third-party software for SaaS companies.

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Frequently Asked Questions (Faqs)

Which SaaS Accounting Program is the most widely used?

Due to its ability to meet a business’s fundamental accountancy needs from its inception to some of its most significant growth milestones, QuickBooks Online is the most widely used accounting software in the SaaS industry. You can use QuickBooks to go into Series C and even beyond, depending on how sophisticated your firm becomes as it grows.

Which SaaS Accounting Program is the most user-friendly?

This is contingent upon the software category. However, in most situations, the most user-friendly software is offered by the new suppliers in each market. For a considerable amount of time, users have been critical of incumbents in every accounting software category. Even if programs like NetSuite have improved recently, more recent programs like Numeric could seem more contemporary since they are designed to address the shortcomings of the more established ones.

What is the Price of SaaS Accounting Software?

The use case and tool maturity have a significant impact on accounting software costs. For instance, the most expensive version of QuickBooks Online is $200 a month. However, upgrading to a feature-rich system like NetSuite might cost you over $1k a month and $25k just for setup. Point solutions that address certain issues that accountants face might be far less expensive. For instance, Ramp, a spend management tool, has a robust free tier that could facilitate the process of spending reporting.

What makes Accounting Software crucial for SaaS Companies?

Accounting software aids SaaS companies in tracking financial performance, automating revenue recognition, managing subscription billing, and adhering to regulatory requirements. Processes like reporting, payments, and invoicing are streamlined, which is important for subscription-based company models.

How is Subscription Billing handled by Accounting Software?

Automated billing is a feature of most SaaS accounting platforms. It generates bills automatically depending on consumption, subscription plan, or a mix of both. It manages membership modifications (such as downgrades or upgrades) and computes prorated payments for mid-cycle adjustments.

What is the most used Software for Accounting?

The most widely used accounting program is QuickBooks Desktop, whereas QuickBooks Online has grown to become one of the most popular accounting suites available right now. With the ability to manage accounting and finance for large enterprises, the Enterprise Solutions Suite delivers the same as Online or Desktop.