SaaS Finance Tech Stack
What is a SaaS finance tech stack?
SaaS finance leaders need the right tools in place to create and utilize real-time financial reports and SaaS specific metrics confidently and consistently. A powerful SaaS finance tech stack provides them with the tools they need today and the flexible, future-proof technology their customers and the market demand for tomorrow.
An ideal SaaS finance tech stack starts with a powerful General Ledger (GL). As the core of your business, it should provide the compliance framework needed to meet audit, GAAP, ASC 606 and IFRS 15 compliance requirements. Way beyond being a General Ledger with core financial capabilities, a GL built for SaaS companies should include the ability to handle subscription, usage and the multitude of SaaS billing scenarios that help your company sell more while also keeping customers happy. It should reduce exceptions with workflow automation and be cloud based for anywhere anytime access.
A powerful SaaS finance tech stack starts small and grows with your company. As you grow, your billing, revenue recognition, and reporting needs become more complex. It should handle this complexity with increased automation and customizable workflows. A few must-have capabilities include: automating revenue recognition, providing one system of record across the customer lifecycle, and integrated reporting capabilities on everything from SaaS Metrics, to user defined dimensions that enable you to capture and report on data unique to your SaaS operations.
Here are the processes a SaaS tech stack can automate, aided by integration, that run the life of the contract:
- Onboard the order usually in a CRM such as SalesForce and flow the data into the accounting and financial management system
- This system then applies the correct pricing and billing scenarios to the order
- Revenue recognition timeframes and amounts are automated for ASC 606 and IFRS 15 compliance, with deferred revenue waterfalls
- Contract modifications and credit memos from upsells and downsells are incorporated and tracked throughout the customer lifecycle
- All of this data from the order to the bill, or quote to cash, is centralized in one system for real-time reporting, in-depth analysis, and forecasting as well as budget-vs-actuals
A cloud-based accounting and financial management system with core financials that have an open API structure enables SaaS companies to take a modular approach to building their SaaS finance tech stack. This approach is nimbler and allows for scaling and introducing further automation through additional modules, or by taking advantage of best-in-class technology.
Ultimately, the right SaaS finance tech stack helps fast growing SaaS companies focus on securing more funding by enabling cross functional teams to shift from manual, spreadsheet processes to more analytical and strategically aligned work. It should include capabilities covering integration with SalesForce to get quotes out quicker, automating usage and subscription pricing and billing scenarios to get paid quicker, to AI assisted multi-dimensional reporting for in-depth analysis to improve SaaS metrics and wow investors.
Once a SaaS company IPOs, the SaaS tech stack continues to bring value, helping the company expand their capital-efficient model to adjacent markets and/or geographies. It continuously helps the company become more standardized with greater controls and compliance with public company reporting and international consolidations.