2 min read
Getting the taxes organised at the end of any fiscal period can be an absolute nightmare for accounting departments. Even for small businesses without multiple departments with their various expenses to track, calculating the amount of revenue and the current cash flow, and reconciling all balances is a herculean task. And that’s before you even begin calculating the due taxes.
Subscription accounting should, in theory, be a little simpler, as the main income is from recurring payments which should be easier to calculate. It obviously depends on the business structure and the tiers available to customers, as well as other revenue streams. Either way, the manual synchronisation of accounting data is always tedious and complex.
Here we look at how to streamline the subscription accounting method, making the end of fiscal periods seem much less daunting to accounting departments and small business owners.
Manual entry subscription accounting
Undertaking any accounting, including subscription accounting, involves a huge amount of data that must be understood and calculated accurately. It is a massively time-consuming task, especially so for any businesses that are expanding and scaling up.
Manual accounting tasks include exporting and importing CSV files, and syncing the billing and accounting systems by writing a special script. There is also the batching of invoices and managing deferred revenue, as well as preparing bank reconciliation statements. These all take up a lot of time and can be stressful due to the precision accuracy that is required.
Accountants also track the balances of discounts, coupons and special offers that customers have used throughout the fiscal period. Undertaking this task manually just seems unnecessarily tortuous, but thankfully there are recurring payments solutions which streamline the whole process.
Streamlined subscription accounting method
Businesses of any size that use a subscription model benefit from implementing a recurring payments solution that solves all the issues of manual accounting. Using an accounting system like Chargebee integrated with Xero through a provider like GoCardless seamlessly consolidates all your invoices, payments, credit notes, refunds and taxes so you don’t need to sync the data between the multiple systems.
Using this kind of powerful subscription accounting software is an absolute must for modern SaaS businesses. The excellent recurring payments software lets you easily manage invoices, payments and taxes. The data is accurately updated so you can use a reporting feature to generate profit and loss statements, balance sheets, accounts receivables reports and tax liability reports.
With properly integrated software like that offered by Xero and Chargebee, you can also manage customers’ invoices and credit notes as well as track all discounts and deals. There is track billing trial management, price grandfathering, proration, usage-based billing, geo-specific tax management, subscription analytics and revenue reports.
The best subscription accounting software on the market today lets you manage your complete subscription lifecycle without the stress of accounting, with the likes of Xero and Chargebee also integrating with top payment gateways such as Stripe and Braintree.
It is always worth shopping around to find the perfect subscription accounting software for your business, so below is a quick list of some of the best offerings you can use for an SaaS business.
Best subscription accounting software
There is a huge array of accounting software available so it can be overwhelming trying to identify the best ones. At GoCardless, we integrate with several excellent accounting software options, so we are well placed to put together a top five list of the best subscription accounting software. The top five are:
Each of these options will serve an SaaS business well, though the simple integration of Chargebee and Xero certainly give them an excellent advantage.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.