Ever wondered how your Finance and Accounting Department compares to other SaaS businesses of similar size? Below is a “back-of-the-napkin” summary of SaaS Finance and Accounting best practices. It was inspired by the SaaS Funding Napkin from Christoph Janz.
Note re: Size: The table below assumes average contract value (ACV) is < $50k. When ACV is > $50-100k, the transaction volume is lower and requires less finance & accounting staff effort. This difference is apparent when working with clients with ACV ranging from $10k to $500k.
Christoph also has an article to help you determine when to hire a CFO.
“QBO” = QuickBooks Online
“ERP” = Enterprise Resource Planning Software
“SMS” = Subscription Management Software
“CTM” = Cap Table Management Software
“M” = “Million”
|SaaS Finance & Accounting Department — Best Practices|
|ARR||$0.1 M||$1 M||$5 M||$10 M|
|Accounting System||QBO||QBO||QBO||QBO or ERP|
|Revenue Recognition||Excel||Excel or SMS||SMS||SMS|
|Cash Forecast Model||Yes||Yes||Yes||Yes|
|SaaS Metrics||Excel||Excel or SMS||SMS||SMS|
|Excel||Excel or SMS||SMS||SMS|
|Cap Table Management||Excel||CTM||CTM||CTM|
|—||Contract CFO||Contract CFO||CFO|
*Especially for fund raising due diligence.