If you are running a SaaS Company, you need appropriate accounting software to streamline your accounting task. Even though tracking account of your business is simple if you have just a few clients, as your business flourishes, it becomes practically impossible for the company to manage various income streams without using accounting software accurately.
This is where the importance of appropriate accounting software comes into the picture. Harnessing the potential of SaaS software, you can create invoices and collect payment from your customers. Apart from that, it helps with taxation purposes and bookkeeping.
What Features SaaS Accounting Software Should Have?
Before we delve deeper into accounting software, we’ll walk you through the features that an ideal SaaS accounting software should have.
All the SaaS Companies have growth and expansion plans. Therefore, an ideal software should be at par with an expanding business.
SaaS is a fast-growing industry. No entrepreneur wants to waste their time dealing with accounting issues, so you need a one-stop solution to all your problems. With automation, you can focus more on the core business than bookkeeping and accounting.
- Support for Many businesses
SaaS business could be of any type. So, your accounting software should be synchronized with your business.
Importance of SaaS Accounting Software
SaaS Companies have realized that Spreadsheets is no longer sufficient for their accounting needs. Recently, Chase lost $2 billion in revenue due to the errors caused by manual entries.
All the SaaS Companies have accounting and budgeting requirements that cannot be fulfilled without reliable accounting software. For instance, if SaaS Company fails to track monthly or annual recurring revenue, they’ll end up with a gloomy picture of the company’s financials.
Calculating the monthly and annual recurring revenue via spreadsheets is practically impossible. Other features that a SaaS Company look for in accounting software are:
- Cash flow forecasting
- Payment integrations
- Ability to integrate CRM easily
Accounting is at the forefront of every business, whether a brick and mortar shop or cloud-based software. Due to the burgeoning demand and spectacular growth of the SaaS business, they can no longer rely on the day-old technology to manage their finances.
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Some of the major tasks that a SaaS Company could not manage without embracing accounting software are:
- Payroll processing
- Revenue recognition
- Cash flow management
- Adjustment of unforeseen expenses
Luckily, a handful of accounting software is readily available to handle time-consuming tasks for you. With an abundance of SaaS accounting software, SaaS business owners often face difficulty selecting appropriate software for their business.
For this reason, we have nailed down the ten best SaaS accounting software for you. Today, no business can survive without using a proper bookkeeping tool.
A wrong selection not perfectly aligned with your business needs might hurt your business, and you are forced to switch to another software.
If you select inappropriate software, you risk your company bookkeeping and accounting. Consequently, you won’t have accurate records of company financials.
One of the biggest mistakes that SaaS Companies often make is its failure to save resources and accurately track company expenses following the agile payment principles.
Poor money management is devastating for your business. However, some tools can efficiently help you manage a company’s cash inflows and outflows.
Let’s dig deeper into the software solutions that can save tremendous time, effort, and resources dealing with accounting problems without any further ado.
1. QuickBooks Online
No other accounting software can fulfil the requirements of a SaaS Company better than QuickBooks Online. What makes this software perfect for a SaaS business is its scalability.
The software offers excellent support that can address your SaaS Company growing need.
Moreover, the software is easy to configure, and its features are counterintuitive.
To further substantiate my claim, let me give you a few reasons why this software could be a good option.
· Grows with Your Business
Ideal accounting software should keep up with the growing demand of your company. As an owner of a SaaS Company, you need to consider this factor while hunting for accounting software for SaaS companies.
If your accounting software fails to keep up with your business demands, you are forced to switch to another software. Consequently, a lot of your valuable time will be wasted in changing software. However, you can avoid this headache by selecting appropriate accounting software.
QuickBooks always remain aligned with growing business needs. If you are a small business owner, you can start with the basic plan and then go up to the advance plan as your business expands.
· Facilitate in Tracking Financial Health
While selecting accounting software for SaaS business, it is worth noting is your software capable of generating accurate financial reports of your business?
As a SaaS business owner, you should track a company’s annual, monthly, or quarterly financial health. To accomplish this task, you have to dig deeper into company books to ensure everything is working smoothly.
In this regard, QuickBooks come in very handy due to its ability to generate fully customizable reports. Its intuitive interface allows you to extrapolate essential information with minimal effort.
· Cooperative Virtual Community
What makes QuickBooks set apart from other accounting software is its robust online community, ready to tranquillize customers’ complaints 24/7.
FreshBooks is primarily designed for small businesses, so if your SaaS business is in an infant stage, consider embracing this software. It offers three leading solutions for the accounting business, mainly Lite, Plus, and Premium.
Each of these options best suits the SaaS business in the growth stage. If you are running on a tight budget, then go with the Lite plan, whereas if you do not have financial constraints, go with the Premium plan.
Even though each subscription plan offers different features, all the plans have some standard features that are deemed necessary for SaaS accounting:
- Time tracking
- Accurate reporting of P&L statements
- Automated expenditure tracking system
- Collaborative tools like file sharing
Apart from that, FreshBooks is creditworthy for small businesses in its ability to accurately track income generated from invoices and money outflow due to operating expenses. This feature makes it well-suited for those business owners who are not familiar with accounting procedures.
However, there are still some shortcomings in FreshBooks that might irritate you:
- Inability to perform double-entry bookkeeping
- Lack of support for account payable or ledgers
- You have to manually prepare your balance sheet, making the accounting process prone to human avoidance.
Although FreshBooks works perfectly well for small SaaS businesses. If you want to execute your aggressive expansion plans, you cannot rely on this software.
FreshBooks’ basic subscription plan is cheaper than other accounting software, while a premium plane is relatively costly. If you are serious with your business, I strongly recommend sticking with the premium plan.
The more advanced the subscription plan is, the more feature you will have.
The basic-level subscription plan is $15 per month. You can only send an invoice to five active customers with this plan. If your SaaS Company has more than 5 but less than 51 clients, we strongly recommend you to go with the $25 per month package. With a premium plan, you can send invoices to 500 customers that cost you $50 per month.
3. Receipt Bank
SaaS business owners love Receipt Bank as it saves a lot of time in resource-intensive bookkeeping processes. All you need to do is take a screenshot of any receivable account and upload it via the app.
Receipt Bank keeps all your receipts in a central location. If you are already using the Xero accounting software, you can integrate that with this software.
Receipt Bank charges its customers every month. Their basic package is $25 that can process up to 50 items, the midrange plan is 40 that can process 100 items, and the premium plan is $55 that can process 150 items.
Bill.com provides a paper-free method for paying bills at any time. All the top banks in the US and leading SaaS Companies endorse Bill.com.
Moreover, bill.com is synchronized with Intacct, Netsuite, and other SaaS accounting software. It allows you to integrate Receipt Bank. All the cash receipts uploaded to the Receipt bank goes to Bill.com, where they are approved.
The basic subscription plan of Bill.com costs $29 per month. This isn’t a helpful option if you are expecting synchronization with Xero. If you want to integrate other software, you should go with the $39 per month subscription plan.
The premium option provides more features, and it costs around $59 per month. After the premium option, there is another pricing plan called “custom,” but they haven’t yet specified that.
Stripe started its journey as a payment processing company. In the beginning, there has been a lot of confusion around this company.
With Stripe, a SaaS Company can pay their vendors electronically. Furthermore, it supports recurring payment options and allows users to deposit money directly into the bank account.
The stripe pricing plan is based on the pay-as-you-go model. It charges 2.9% of each transaction. This pricing best suits SaaS companies with a low volume of high-value orders.
Gust is a platform that facilitates Companies in onboarding and supporting their team. The software connects small business owners with licensed advisors to incentivize their teams.
The tool aids companies in payroll processing and payroll taxes. Likewise, it helps workers take their investment decisions via the Gusto Wallet app.
The Gusto app first came into the picture in early 2011 and had been helping businesses outsource their HR services from then on. It charges $19 per month for a basic plan well-suited for a small company.
While you are tracking the sales of your specific product or a subscription service, you should consider using Sush.io. It brings all the automatically generated sales invoices and verifies them with the Stripe transactions.
You can also integrate other accounting-related software with Sush.io. Another fascinating feature of this software is that it handles refunds seamlessly. If your repayments are annoying you, this software will eliminate your headache.
Their basic pricing plan starts with $25 that can handle around 500 transactions. The advance package costs $50 that can handle 3000 transactions.
You must be familiar with PayPal, which allows you to send and receive payments anywhere worldwide. With PayPal, you can pay a freelancer or your offshore technical staff.
PayPal is a must-to-have software for those SaaS Companies who are working globally. If you are living in a country where PayPal is not available, here are some alternatives of it:
It is amongst the rising star in the payment industry. It accepts debit cards and is likely to become an alternative to PayPal.
Worldpay provides an easy and instant online payment solution.
With Harvest, you can track how many hours your employees have worked. On the other hand, it allows them to select their working hours. Moreover, it enables users to configure their time by project and add notes when required.
Apart from time tracking, Harvest assists its users in easy invoicing. It is a great tool to keep an eye on business profitability and efficiency. Additionally, its UI is counterintuitive.
What makes it worth investing in its support for Xero, QuickBooks, and 80 other apps.
Quaderno is a fully-automated software that takes care of your documentation and makes it compliant with international standards. It can be integrated into almost any other accounting software.
The most appealing feature of Quaderno is it assists businesses in tracking sales tax in different countries. Furthermore, it creates sales tax and invoices in various languages and currencies.
At $29 per month, it can handle around 250 transactions. At $79 per month, it can handle 1000 transactions, and for 2500 transactions, it charges you $149 per month.
Its basic package allows you to fetch 2500 APIs, and the top package will enable you to fetch 25000 API requests. Besides, you’ll get 24/7 email support at the premium package.
So far, we have discussed a myriad of automated tools that can assist SaaS companies to manage their accounting tasks. If you were confused before which software best suits my business, I sincerely hope this article will provide you with an in-depth understanding of each software.
Have you ever tried any of the software mentioned above before? Feel free to share your personal experience with us.