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What is a good accounting solution for a pure SaaS/cloud business?

Curious what's hot these days, specifically accounting apps that can handle the deferred revenue, MRR/ARR sales models common to cloud business.

21 Replies

Andrew Lockley
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1
Andrew Lockley Advisor
Investor and strategy consultant
default is xero for everything. you need a v. good reason not to use it
Mark Wald
2
1
Mark Wald Advisor
Managing Director at Supporting Strategies - Santa Monica
Netsuite is the gold standard for robust cloud-based accounting with programmable functionality to customize and automate processing of recurring transactions--but it is prohibitively expensive for an early stage startup. There are also many 3rd party billing apps that integrate with the accounting software and enable more customized and automated MRR billing functions. Message me and I'll be happy to share more details with you.
Regardless of the software you use, it is critical that you have the right people and processes in place to manage your billing, revenue recognition, and all other accounting functions to ensure timely, accurate, and actionable financial reporting that enable management to make educated strategic decisions in real time.


Becky Flint
0
0
Becky Flint Advisor
Product & Program Executive | Scaffold Consulting
For SaaS business model you may consider Zuora. At Bigcommerce (a Saas B2B company) we switched to Zuora from "traditional accounting software"
Alex Eckelberry
1
0
Alex Eckelberry Advisor
CEO at Meros.io
@Andrew Lockley, Xero is certainly very simple, but I'm not getting a good feeling that it's built for a SaaS model business. Have you seen it used in this environment?
Andrew Lockley
0
1
Andrew Lockley Advisor
Investor and strategy consultant
Not specifically, but I've heard that some VCs automatically turn down people who don't use it - so I assume it's capable enough. A
Alex Eckelberry
1
0
Alex Eckelberry Advisor
CEO at Meros.io
My concern was I went to their website, asked them a question about ARR in their chat app, and they were clueless. But I will take a stronger look. Certainly it looks painless and incredibly easy to use.
Mark Wald
2
1
Mark Wald Advisor
Managing Director at Supporting Strategies - Santa Monica
@Andrew
Would you please qualify your response above--which VC's have you heard that about and/or who have you heard that from?

Based on my professional experience, I can say with confidence that Xero is NOT an appropriate platform to handle fully automated MRR/ARR billing and proper accrual-based revenue recognition of SaaS businesses. It is possible for skilled accounting resources (people) to use the native Xero software to facilitate billing and revenue recognition for many businesses, but let's be clear--that requires a combination of MANUAL processes to bridge the gap between what Xero is currently designed to handle vs what a SaaS business with prepaid subscription and recurring billing functions really needs. To be clear, QuickBooks also doesn't currently offer a fully automated/integrated solution to facilitate the process Alex is asking about.

Bottom line, businesses either need to budget $25-50k to implement and configure a robust ERP software like Netsuite to manage a nearly fully automated process for this plus $20-75k/year annual licensing fees, or use a combination of much less expensive software plus skilled labor resources to accomplish the same thing with a more process-driven approach.

Mark
Andrew Lockley
0
1
Andrew Lockley Advisor
Investor and strategy consultant
It was secondhand info I'm afraid. The challenge was framed as a question, with Xero being the 'right' answer and Quicken and/or Sage (cant' recall which) being the 'wrong' answer. I assume that more sophisticated/specialist packages would also be 'right'. A
Bertrand NAVARRE
0
0
Bertrand NAVARRE Entrepreneur
Founder & Director at CalcFusion Ltd.

We have developed a technology that add level of flexibility through APIs to any system. It works by transforming Excel spreadsheets into APIs, it's called CalcFusion.

Alex's request is a perfect use case: automate, compute, allocate, generate


CalcFusion is an horizontal technology and we are looking for partners/co-founders to market verticals solutions. Accounting/Finance being a natural fit but also, ecommerce, logistic, supply chain...

Co-founder skills needed: Product, Marketing, Enterprises Sales, SaaS


Bertrand
CalcFusion.com
Transform spreadsheets into apps


PS: just new on FounderDating, we also looking for advisor in US

Mark Stephenson
1
0
Mark Stephenson Advisor
Head of Technology and Delivery at evvnt
I inherited Xero as the accountancy platform of choice when we were acquired. We have one full time accounts manager to spends most of her time in there. Its not massively flexible around reporting and the matching of payments etc has been a real pain over the API. On that point you should note that Xero themselves say that you should only use them if you are going to do less than 20000 transactions (I think thats the number) a month. This might be perfect for some, but completely prohibitive for others. If we continue to grow at the rate we do then the integration we have in place with Xero will have to be ripped out and we'll effectively have to start again.
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