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Guide to SaaS for Accounting Firms

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJun 20242 min read

Software as a service is an increasingly popular business model, with many new startups offering innovative tech solutions for a monthly subscription cost. This is a great strategy as it ensures a regular stream of income, and there are many customers that are willing to make these regular payments.

However, this kind of business model comes with specific needs when it comes to accounting. Any accounting solutions that you use should be specific to the SaaS model, with the infrastructure in place to support recurring payments. What’s more, cash flow dynamics are more complex when it comes to the subscription model. Keep reading to find out more about SaaS providers for accounting and how GoCardless can support the needs of your business.

How is accounting different for SaaS businesses?

The key difference between regular businesses and SaaS businesses is the way in which payments are received. In other words, you need to remember that a SaaS business uses a subscription model, and consider the unique features of this.

For example, the most significant difference is in revenue tracking, which refers to the process of reporting revenue, the number of units sold, average order value and the number of orders. In the case of SaaS businesses, there are subscription fees and add-on fees which must also be considered, and may need to be adjusted as customers’ needs develop.

In addition, SaaS businesses will require specific tools such as subscription management software and recurring billing platforms to process their regular payments.

What is the best SaaS accounting software?

There are a number of different factors that you should consider when selecting the best SaaS accounting software for your company.

GoCardless is a top SaaS provider for accounting, allowing you to easily take recurring payments via ACH debit. ACH payments are made via the Automated Clearing House network, which is a secure and convenient way to transfer funds from one account to another. Customers simply need to provide payment details and authorization once, and payments will then be collected automatically on the pre-agreed date.

What’s more, GoCardless can be integrated with other financial software such as Xero and Zoho. This allows you to seamlessly send invoices and automatically collect and reconcile payments.

Types of SaaS Accounting

When considering SaaS for accounting firms, it’s essential to also think about the different methods that you can use for this. There are two basic types, which are referred to as cash-basis accounting and accrual accounting.

Cash-basis accounting

In cash-basis accounting, expenses and revenue are recognized when the cash is actually transferred. So expenses are subtracted from the ledger when the payment leaves the business account, and revenue is recorded once the money arrives in your business account. There is no consideration of accounts receivable or accounts payable.

Cash-basis accounting is simple to maintain and makes it easier to track the amount of cash your business has at any given moment. On the other hand, this makes it difficult to forecast future performance, and it can be insufficient when you’re running a larger-scale business.

Accrual accounting

The other method of accounting is known as accrual accounting. In this case, revenues and expenses are recorded when they are earned, whether the payment has actually been made or noted. This is the most commonly used method and is better suited for growing businesses, despite being more complicated to manage.

With accrual accounting, you get a more accurate representation of the company’s profit at any given moment, and you can easily forecast your future expenses and revenues. The drawback is that it requires complex bookkeeping processes. However, this can be made easier with the help of an SaaS provider for accounting, such as GoCardless.

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.