Best Accounting Software for SaaS Companies: A Guide for Early-Stage Startups

As a SaaS organization, you’re leading the charge in technological innovation. A dedication to being at the forefront of technology is an integral part of the DNA of your startup. However, this dedication to technology should extend past the scope of your product and into all areas of your business.

Technology is critical across your startup’s finance and accounting initiatives.

So what is the best startup accounting software to help you keep your books in order, help you achieve tax compliance, and boost your efficiency?

Before we get into our recommendations, let’s talk about some key considerations when selecting SaaS accounting software solutions for your startup.

How SaaS Companies Choose Accounting Software

With the explosion of options for technology out there now, it’s more important than ever to be intentional about selecting the right accounting software.

In addition to ensuring that your tools have the basic functionality and features that you need, there are a few other considerations that are especially relevant to you as a SaaS organization.

Scalability

Whether you’re currently experiencing growth or are ramping up to raise funds so that you can get to that next level, you need to make sure any technology you get grows with you.

Failure to acknowledge the possibility that your current needs may look very different in a year or even a few months can lead to wasted resources - both financially and with the time you invest in implementing it.

To avoid any headaches, make sure you select accounting software that is adaptive and can suit even the most complex financial situations. Startup accounting software doesn’t always mean small scale - it means that it can flex to fit startups in the many stages they go through.

Integrations

You’re a SaaS company, so integrations are important. Your startup likely has many existing systems that you use to stay on top of your finances (a PEO, an invoicing platform, etc). When you’re considering a new tool to add to the stack, you want to prioritize trusted integrations.

When everything integrates seamlessly - from your accounting software to payroll to accounts receivable - you spend less time manually jumping back and forth between tools and more time on the financial processes that matter.

Data Analytics and Reporting

A strong accounting strategy extends far beyond simply keeping a record of the money coming in and out of your company. The startups that are best positioned for growth use their financial data as fuel for decision-making.

To leverage your financial data, you want to make sure that your accounting software offers robust financial reporting and analytics. While you may bring in a dedicated tool for these strategic processes, native reporting in your financial tech is helpful for in-the-moment analysis.

Future-Proofing

Technology is evolving at a fast pace. Just look at the speed at which artificial intelligence has been adopted across industries in the past year. Many SaaS startups have been agile in their efforts to integrate AI into their products, and that forward-looking focus is what makes those solutions attractive to work with.

You don’t want to select a software solution that has been stagnant for years. Seek out a product that is constantly being innovated and improved. If you are strategic about selecting a piece of technology that evolves as the times do, you will reap the benefits.

Top Features to Look For in SaaS Accounting Software

Aside from scalability, integration opportunities, analytics and reporting prowess, and future-proofing, there are various other key factors to be mindful of when selecting the right accounting software for your startup. Some of the features to be on the lookout for with your SaaS accounting:

• Automation: The right accounting software can automate billing, reporting, compliance checks and other repetitive tasks to reduce human error and streamline efficiency.
• Security and privacy: Protecting your startup and your clients is imperative to maintaining a good reputation. In addition to ensuring the platform you select is offered by a quality provider, make sure that it encrypts data, offers multi-factor authentication and complies with leading standards.
• Ease of use: Good programs aren't just robust in what they can do for your startup, but they're also easy to learn and use.
• Customer service: If you have a question or run into a problem, it's only natural to want to get answers fast. Hence, a good program should also provide customer support when roadblocks arise to ensure minimal business interruption and inconvenience.

Why Accounting Software Matters for SaaS Startups

Accounting is the backbone of your organization’s finances. No matter how tight your processes are in other areas of the business, if your accounting processes are not in order, it sabotages your ability to make critical operating decisions - or even to stay in business.

That’s why there’s a lot of pressure to get accounting software right.

Accounting software stores, organizes, and manages all of your startup’s financial operations. You’ll use this software to record transactions and produce basic financial reports like P&Ls and balance sheets. You’ll eventually use the information housed in this system to file your taxes.

Accounting software, specifically curated to your needs as a SaaS startup, will create reliable processes that ensure your team is:

• Compliant with tax regulations
• Not burning cash too fast
• Able to access all the data you need to plan for the future

You have to find accounting software that seamlessly integrates with your existing systems while meeting your most pressing needs. When you find the right fit, this software will help your startup maintain financial health and stability. This will show well for investors, but it will also allow you to focus even more on growth and innovation for your organization.

Technology is just one piece of the puzzle. Strategy is what matters most.

Strategy and Technology: A Balanced Approach

Strategy and technology aren't mutually exclusive when it comes to running your SaaS startup or selecting the right accounting software to propel it. Navigating the ever-changing technological landscape is best done with a strategic approach to truly streamline efficiency by meeting the needs of your startup both in the present day and with a look ahead into the future as well.

In other words, while technology and innovation are essential for business growth and prosperity, the adoption of such should be done as part of a larger overall strategic approach to maximize effectiveness. Aligning software capabilities with business goals can help improve efficiency, allow for better, more informed decision-making, improve transparency and real-time reporting, and increase collaboration to boot.

Best SaaS Accounting Software for Early-Stage Startups

There is no shortage of accounting software out there for you to pick from. With all of these options, it can be a little intimidating to know which is the right one for you.

As financial experts who work closely with startup clients who are in these tools noticing their strengths and weaknesses every day, the top contenders have become very clear.

QuickBooks Online

Quickbooks is among the best programs for early-stage and high-growth startups alike.

We find that this software has the most comprehensive range of features that are custom-tailored to the unique needs of rapidly evolving SaaS businesses.

It is scalable, cloud-based and easily integrates with a range of the most-used business tools in SaaS companies. Additionally, it’s extremely user-friendly, which makes it easy for anyone on your team to jump in and find the features they need.

Rillet

Rillet is another incredible startup accounting software because it was designed precisely for SaaS startups.

The platform is feature-heavy, giving teams the ability to sync with a variety of systems, analyze their data, and stay on top of all of their financial operations. They also take advantage of the latest tech innovations - namely, AI - which is attractive to SaaS startups who want the best-in-class solutions.

The interface is also extremely clean and easy to navigate, despite its advanced capabilities.

NetSuite

For the SaaS startups with slightly more complex operations, we’d highly recommend NetSuite.

This tool has the widest range of features that cover not just accounting tasks, but also ERP, CRM, and e-commerce capabilities. This range makes NetSuite an attractive choice for a unified platform for managing various business processes.

NetSuite is also customizable and flexible. While teams with simpler operations may prefer more of a plug-and-play approach, teams with more complex operations need a solution that is custom-fit to their needs. This tool fulfills this need while eliminating the necessity of hiring someone to build a custom solution from scratch.

Maxio

Maxio is a platform that was built by business-to-business SaaS leaders for business-to-business SaaS startups.

Designed to help SaaS startups save time, mitigate risk and better manage audits, Maxio also automates billing, subscription management, collections and reporting to streamline productivity and close out books faster.

Regarded as one of the best platforms for B2B SaaS startups, it also packs features to help reduce churn and retain clients and delivers real-time metrics to empower you to make faster, smarter decisions.

Chargebee

Chargebee helps SaaS startups simplify their accounting and forecast with a greater level of certainty, helping growing companies manage their finances with ease.

With features that help startups scale, the platform helps automate redundant tasks and forecast with greater predictability - all while ensuring GAAP, ASC 606 and IFRS-15 standards and regulations are met.

One of the unique features for SaaS startups is a smart billing engine that allows for the maximization of recurring revenue by simplifying complex billing, automating subscription lifecycle management and managing churn.

Ramp

Accurate bookkeeping, automating repetitive tasks and ensuring compliance all along the way, make Ramp one of the ideal options for SaaS startups.

Ramp allows users to sync data in real-time with a single click and offers advanced spend management features for startups.

From coding credit card transactions to translating visibility into spend, Ramp excels at helping startups save time on financial management so they can spend more time growing and evolving their business.

Accounting Software for SaaS Startups: Just the Beginning

The accounting software you select, while critical, is just the beginning of your startup’s growth journey. You also need reliable and strategic financial and accounting processes.

The best way to reach even the most aggressive business growth goals - whether you’re early-stage or several years into your journey - is to bring in a financial pro to point you in the right direction.

Graphite provides accounting services, fractional CFO support, and tax compliance guidance to help startups forge a strong foundation.

Need CFO or Accounting Help?

If your startup needs personalized accounting support, connect with Graphite Financial today for personal service that's tailored to your startup and the phase of business that it's in. We've partnered with hundreds of SaaS startups and have the experience and know-how when it comes to helping businesses scale.

Our specialized services for SaaS startups include bookkeeping, revenue recognition, bill pay and invoicing, fundraising, tech stack implementation, expense reports, financial modeling and analysis, tax compliance and more.

Contact us today to schedule a free consultation, learn more about our flexible pricing plans and see how Graphite can help position your startup for future success.

FAQs

What are the potential pitfalls of using generic accounting software for a SaaS business?

SaaS businesses have unique accounting needs based on their subscription-based revenue model. Cash flow dynamics tend to be more complex due to recurring payments, which thereby require more specialized accounting programs.

How can accounting software help SaaS companies manage customer churn and retention?

A good SaaS program can manage customer churn and retention by offering systems that work together to balance both process and customer experience. From robust onboarding to collecting customer feedback to providing customer support and helping with problem-solving, accounting software can help curb the rate at which customers are lost over time and help better retain customers.

What are the key differences between cloud-based and on-premise accounting software for SaaS businesses?

Cloud-based software is hosted by a third-party vendor in a secure location, while on-premise accounting software exists on-site and is hosted by the business itself.

How does accounting software facilitate the financial planning and analysis (FP&A) process for SaaS companies?

Good accounting software can help with FP&A in a variety of ways, from budgeting and scenario analysis to forecasting and data visualization.

What role does AI play in modern accounting software for SaaS companies?

AI can help automate activities that would otherwise be repetitive and time-consuming. Data entry, inventory management, invoice processing and reconciliations are all examples of activities that AI can help streamline.

How can SaaS companies evaluate the ROI of their accounting software investment?

There are numerous SaaS metrics startups can use to evaluate ROI, but one of the biggest factors to pay attention to is revenue gains. If accounting software is doing its job streamlining processes, you should see an impact on your bottom line.

What are the legal and compliance considerations when choosing accounting software for a global SaaS business?

In addition to security audits, there is financial, security and data privacy compliance that SaaS startups must comply with.