Last editedMay 20222 min read
Your business provides software as a service, but are you using the most effective accounting software yourself? For SaaS companies, the best accounting software keeps all your finances in one handy place for accurate recordkeeping, invoicing, and taxation. This is particularly important as your business grows in scope, and you need to keep client records organised. Yet not all software is created alike, so here’s our roundup of the best accounting software for SaaS companies.
Features to look for in the best accounting software
SaaS companies have specific accounting needs. One thing to keep in mind is recurring invoicing and billing. Many SaaS businesses use a subscription-based structure and pricing model, which leads to the need to track metrics like Monthly Recurring Revenue (MRR) as well as issue regular recurring invoices to customers. Revenue recognition is also important, ensuring that all revenue makes its way into the appropriate accounts. It’s difficult to handle these types of tasks in Excel alone, which is where accounting software comes in handy. Additional features to look for include:
Cash flow forecasting
Third-party payment integrations
The top 5 best accounting software for SaaS companies
The best accounting software for SaaS companies will tick all the boxes with the features mentioned above:
Xero is a great all-rounder for SaaS providers, offering a cloud-based structure and access to an impressive volume of third-party integrations for customisation potential. For example, Xero integrates with GoCardless to let businesses send recurring invoices, collect payments, and automatically reconcile transactions. On its own, it also gives you automatic, real-time bank and credit card feeds, and can assist with complex invoicing needs.
2. QuickBooks Online
Another top choice for small businesses is QuickBooks Online. This popular accounting software is ideal for SaaS companies due to its cloud-based nature and scalability. As your business grows, you can add additional features as needed. The software includes an open API that connects directly to your business’s platform, ensuring that data is automatically entered without any need for manual input. This can save significant time and money. SaaS companies will also benefit from its recurring transaction function and third-party integrations.
3. Zoho Books
The Zoho suite of software includes both Zoho Books for everyday accounting and Zoho Subscriptions for recurring billing and subscription management. SaaS business can record customer data, automate the invoicing process, and schedule your billing cycles according to your business model. Zoho offers automated proration so that you don’t have to adjust the subscription cost manually when customers change their services mid-billing cycle. It also helps you track over 40 SaaS metrics including lifetime value, churn rates, and MRR.
Another popular contender for best accounting software for SaaS companies is FreshBooks. Perhaps its biggest benefit is its user-friendliness. FreshBooks is easy for even beginners to learn, with a straightforward system focused on recording income and expenses. If you freelance or have a small start-up, this could be ideal. However, larger companies might look for a more comprehensive software program, as FreshBooks won’t cover double-entry accounting and bank reconciliation.
When it comes to collecting SaaS subscription payments, GoCardless is top-notch. It offers a Becs Direct Debit solution to put SaaS companies directly in charge of pulling payments on time, every time. The Success+ intelligent retries tool automatically tries again to collect payment if the first attempt fails, recovering an average of 76% of payments that initially fail. Users can also take payments from over 30 countries at the real exchange rate, which assists with international expansion. In terms of accounting features. GoCardless integrates with major software partners like Xero and Zoho to keep your finances on track.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.