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SaaS Accounting:
Get to know your money flow
Price Intelligently’s SaaS Metric Mondays
SaaS Accounting
SaaS Accounting
Let’s talk about SaaS accounting
The spreadsheet science that drives your SaaS forward
Bookings:
Exist when a customer
agrees to spend money with
you
SaaS Accounting
Bookings Example
A customer just signed an annual contract (12 months) on
January 15 to use your app for $24,000 at $2,000 per
month
Want To See What Your SaaS Metrics Are Right Now?
Get your free ProfitWell account – 1-click SaaS Metrics >>
SaaS Accounting
Here’s how Bookings is recorded
SaaS Accounting
Recognized Revenue:
The point at which a booking
becomes actual revenue by
you delivering the product
SaaS Accounting
Here’s how Recognized Revenue is recorded
SaaS Accounting
Deferred Revenue:
Revenue you’re expecting
from your booking, but you
haven't delivered on the
agreement yet
SaaS Accounting
Here’s how Deferred Revenue is recorded
SaaS Accounting
Recognized/Deferred
Revenue Example
You received the $24,000 contract that you booked (the
booking) on January ’15. You accrue revenue for each day
you fulfill the contract with your customer, recognizing that
revenue in your receivables. The rest of the revenue on the
contract is deferred revenue until you deliver
SaaS Accounting
Get your free ProfitWell account – 1-click SaaS Metrics >>
Want To See What Your Revenue Metrics Are Right Now?
Cash Collections:
When cash hits your bank
account from your customer
SaaS Accounting
Here’s how Cash Collections is recorded
SaaS Accounting
Cash Collections Example
Continuing our example, we booked a $24,000 contract on
January 15 where we agreed with the customer to collect
payment on a quarterly basis. Giving us $6,000 per quarter.
Note how our recognized and deferred revenue does not
change
SaaS Accounting
Get your free ProfitWell account – 1-click SaaS Metrics >>
Want To See What Your SaaS Accounting Metrics Are Right Now?
“Not utilizing your SaaS accountant
is like having LeBron James on
your pickup team and benching
him”
SaaS Accounting
All that stuff is great but…why do
you need to track this stuff?
SaaS Accounting
More specifically…
Understanding your SaaS accounting metrics can
help in these ways:
See the breakdown of your Accounting Metrics with ProfitWell >>
SaaS Accounting
Bookings Recognized/Deferred
Revenue
Cash
Collections
MRR
Measuring the
impact and growth
of your sales over
time
Making accurate
predictions concerning
your cash flow and clearing
up the financial health of
your business
Knowing how
much you can
spend
Identifying your
Momentum as a
subscription
business
Awesome! You’ve just about
mastered your SaaS
accounting metrics. Here’s a
quick recap of what you
should know.
SaaS Accounting
SaaS Accounting
Type Description GAAP Used for
Bookings Amount customer committed
to spend
No Measuring the impact and
growth of your sales over
time
MRR Contract amortized into
subscription revenue
No Identifying your Momentum
as a subscription business
Recognized
Revenue
Revenue accrued for
service/product delivered
Yes Making accurate predictions
concerning your cash flow
and clearing up the financial
health of your business
Deferred Revenue Revenue not yet earned with
service/product still owed to
the customer
Yes Making accurate predictions
concerning your cash flow
and clearing up the financial
health of your business
Cash Collections Actual cash collected and
deposited into the bank from
the customer
No Knowing how much you can
spend
Boom. You’re now a SaaS
Accounting superstar.
SaaS Accounting
Want real time SaaS Metrics?
Know and understand your SaaS Metrics
with ProfitWell for free – the most accurate
metrics on the market
Click here to get your free ProfitWell account >>
SaaS Accounting

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SaaS Accounting: The blueprint to understanding and optimizing

  • 1. SaaS Accounting: Get to know your money flow Price Intelligently’s SaaS Metric Mondays SaaS Accounting
  • 2. SaaS Accounting Let’s talk about SaaS accounting The spreadsheet science that drives your SaaS forward
  • 3. Bookings: Exist when a customer agrees to spend money with you SaaS Accounting
  • 4. Bookings Example A customer just signed an annual contract (12 months) on January 15 to use your app for $24,000 at $2,000 per month Want To See What Your SaaS Metrics Are Right Now? Get your free ProfitWell account – 1-click SaaS Metrics >> SaaS Accounting
  • 5. Here’s how Bookings is recorded SaaS Accounting
  • 6. Recognized Revenue: The point at which a booking becomes actual revenue by you delivering the product SaaS Accounting
  • 7. Here’s how Recognized Revenue is recorded SaaS Accounting
  • 8. Deferred Revenue: Revenue you’re expecting from your booking, but you haven't delivered on the agreement yet SaaS Accounting
  • 9. Here’s how Deferred Revenue is recorded SaaS Accounting
  • 10. Recognized/Deferred Revenue Example You received the $24,000 contract that you booked (the booking) on January ’15. You accrue revenue for each day you fulfill the contract with your customer, recognizing that revenue in your receivables. The rest of the revenue on the contract is deferred revenue until you deliver SaaS Accounting Get your free ProfitWell account – 1-click SaaS Metrics >> Want To See What Your Revenue Metrics Are Right Now?
  • 11. Cash Collections: When cash hits your bank account from your customer SaaS Accounting
  • 12. Here’s how Cash Collections is recorded SaaS Accounting
  • 13. Cash Collections Example Continuing our example, we booked a $24,000 contract on January 15 where we agreed with the customer to collect payment on a quarterly basis. Giving us $6,000 per quarter. Note how our recognized and deferred revenue does not change SaaS Accounting Get your free ProfitWell account – 1-click SaaS Metrics >> Want To See What Your SaaS Accounting Metrics Are Right Now?
  • 14. “Not utilizing your SaaS accountant is like having LeBron James on your pickup team and benching him” SaaS Accounting
  • 15. All that stuff is great but…why do you need to track this stuff? SaaS Accounting
  • 16. More specifically… Understanding your SaaS accounting metrics can help in these ways: See the breakdown of your Accounting Metrics with ProfitWell >> SaaS Accounting Bookings Recognized/Deferred Revenue Cash Collections MRR Measuring the impact and growth of your sales over time Making accurate predictions concerning your cash flow and clearing up the financial health of your business Knowing how much you can spend Identifying your Momentum as a subscription business
  • 17. Awesome! You’ve just about mastered your SaaS accounting metrics. Here’s a quick recap of what you should know. SaaS Accounting
  • 18. SaaS Accounting Type Description GAAP Used for Bookings Amount customer committed to spend No Measuring the impact and growth of your sales over time MRR Contract amortized into subscription revenue No Identifying your Momentum as a subscription business Recognized Revenue Revenue accrued for service/product delivered Yes Making accurate predictions concerning your cash flow and clearing up the financial health of your business Deferred Revenue Revenue not yet earned with service/product still owed to the customer Yes Making accurate predictions concerning your cash flow and clearing up the financial health of your business Cash Collections Actual cash collected and deposited into the bank from the customer No Knowing how much you can spend
  • 19. Boom. You’re now a SaaS Accounting superstar. SaaS Accounting
  • 20. Want real time SaaS Metrics? Know and understand your SaaS Metrics with ProfitWell for free – the most accurate metrics on the market Click here to get your free ProfitWell account >> SaaS Accounting