Entry-Level Options
QuickBooks Online
QuickBooks Online is a popular, cost-effective accounting tool widely used by startups and early-stage companies. It offers essential accounting functionalities with cloud-based access and integration with various business applications.
- Benefits:
- Affordable and widely used, making it a familiar choice for many.
- User-friendly interface requires minimal training.
- Flexibility through third-party application integrations.
- Supports basic payroll, bill pay, and invoicing needs with the use of additional modules.
- Considerations:
- Basic functionality may not meet complex SaaS accounting needs.
- Customization and reporting capabilities are limited.
- Has very limited approval and access-rights features embedded within the platform, making it a less reliable source of internal controls and guardrails in the prevention of user error or fraud.
- Cannot accommodate multientity/multiple-business line organizations due to its lack of consolidation capabilities.
Xero
Xero is a small business accounting software package historically known more outside of the U.S., but quickly gaining popularity thanks to its reporting and cash flow forecasting features. Xero is praised for its revenue recognition software integrations and user-friendly interface. It provides robust accounting features that are essential for SaaS companies, such as tracking recurring revenue and managing subscriptions.
- Benefits:
- Capability to make and accept payments in multiple currencies.
- Supports many third-party application integrations.
- Considered to be an intuitive option with low barriers to entry for knowledge and training.
- Considerations:
- Limited customization options.
- No native support for multientity environment.
Mid-Tier Options
Sage Intacct
Sage Intacct is known for its advanced financial management capabilities, reporting, and high degree of customization. It provides real-time financial and operational insights and strong integration with other systems, making it suitable for SaaS businesses with complex accounting requirements. For example, Sage Intacct can be integrated with customer relationship management (CRM) solutions. Sage Intacct offers SaaS companies a “Digital Board Book,” with an additional subscription, for tracking metrics and KPIs customized to the industry. Pre-built dashboards present the metrics visually for easy sharing with stakeholders to aid in decision making.
- Benefits:
- Native subscription billing and advanced capabilities to monitor customer activity and trends.
- Revenue recognition/amortization with visibility into recurring revenue to support ease of accurate recording consistent with contract terms and GAAP.
- Wide-ranging financial management tools to support complex needs.
- Integrations help streamline operations and improve data accuracy.
- Multientity-enabled system allowing for native consolidated reporting.
- SaaS-templated functionality pre-established within the platform can be tailored to suit a company’s specific requirements.
- Considerations:
- Can have a steeper learning curve due to its advanced features.
- Implementation may require specialized consulting services.
- Annual licensing fees are at a price point typically multiple times greater than the entry-level options.
NetSuite
NetSuite is an in-depth, cloud-based enterprise resource planning (ERP) software solution designed for complex businesses. It offers an integrated suite of financial management, CRM, and e-commerce applications. Known for its scalability and real-time operational visibility, NetSuite is ideal for growing and high-growth SaaS businesses seeking an all-in-one platform. NetSuite has modules or “Suites” that include finance and accounting, forecasting, inventory management, “OneWorld” for global multientity businesses, and other functions.
- Benefits:
- Integrated suite reduces the need for multiple software solutions.
- Real-time SaaS metrics aid strategic decision-making.
- Additional modules provide capabilities for managing recurring revenue streams and automating customer invoicing.
- Highly customizable platform options support organizational growth and scalability.
- Considerations:
- Complexity and breadth of features require significant training.
- Implementation may require specialized consulting services.
- Extensive customization might require additional IT resources for ongoing maintenance of the system and upkeep of the highly customized configurations that have been established and/or when product updates roll out. This might necessitate additional headcount or utilization of an outsourced managed technology support services provider.
- Annual licensing fees are at a price point that is typically multiple times greater than the entry-level options.
Other Considerations
Each of these accounting software solutions also works with accounting firms to offer clients access to their platforms leveraging an outsourced accounting services (OAS) model.
The OAS model provides SaaS organizations with strong, leverageable accounting talent and the ability to utilize the automation and general ledger platforms with which they have partnerships, often at a fraction of the price of implementation and licensing their own instance. With outsourced services greatly in demand by business owners who want to reduce time on work unrelated to their core business, Forvis Mazars can provide detailed comparisons and insights into an ideal fit for your SaaS business, not only in terms of an accounting platform but also considering in-house versus outsourced accounting functions. If you have questions or need assistance, please contact a professional at Forvis Mazars.
