SaaS Finance and Accounting Dept Best Practices
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 |
| Staffing | Founder or Office Manager |
Bookkeeper & Contract CFO |
Controller & Contract CFO |
Controller & CFO |
| Taxes | CPA | CPA | CPA | CPA |
| 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 |
| Subscription Management |
Excel | Excel or SMS | SMS | SMS |
| Cap Table Management | Excel | CTM | CTM | CTM |
| Business Partner with Founder* |
— | Contract CFO | Contract CFO | CFO |
*Especially for fund raising due diligence.
