The 9 Best Accounting Software Tools for SaaS Companies

This eliminates manual data entry and ensures data flows smoothly between systems. Plus, HubiFi provides real-time analytics and customizable dashboards, giving you immediate insights into your financial performance. You get a clear, up-to-the-minute view of your key metrics, empowering you to make informed decisions based on current data, not outdated reports. Learn more about how HubiFi helps SaaS businesses gain better visibility into their financials. While the initial implementation of ASC 606 posed significant challenges, ongoing compliance continues to create complexities for privately owned software and SaaS companies. Accrual accounting utilizes accounts receivable and accounts payable to record revenue when they are earned and expenses when they are incurred, respectively.

Bookings are a measure of how many new customers have signed up for a subscription, whether or not they have paid yet. Due to churn and customer upgrades and downgrades during the year, there will be slight variations. For the most part, though, these metrics are similar enough that they can be used interchangeably in quick financial ratio calculations.

User-Based Pricing Explained

It’s the best SaaS accounting software for small businesses and solopreneurs who want a modern interface with accounting automation. That’s because it combines AI-powered accounting with enterprise resource planning (ERP) tools to support overall business growth. And the good news is that this accounting software is scalable—your business can still fit in even if it’s growing rapidly. Wave Accounting is among the best SaaS accounting software built for small businesses, freelancers, and self-employed entrepreneurs.

Instead of manually calculating revenue for each contract over its lifetime, the software handles it automatically, freeing your team to focus on higher-value tasks. This automation minimizes the risk of errors and ensures your financial statements accurately reflect your performance. Plus, it makes audits much smoother by providing the necessary documentation and audit trails.

Reporting and analytics

While spreadsheets might work for very small startups, they quickly become inadequate as your SaaS company scales. One major limitation is handling long-term contracts and recognizing revenue accurately. Spreadsheets lack the functionality to automate this complex process, increasing the risk of errors and non-compliance. Manual processes also slow down your financial close, leaving less time for strategic planning.

The most common benefits of these tools include integrations, secure data storage, and automation capabilities. With custom invoicing, cloud accounting software transforms how businesses handle billings, making it an indispensable tool in any modern company’s financial toolkit. On the other hand, accrual basis accounting recognizes revenue and expenses when they are earned or incurred, regardless of when cash is received or paid. SaaS businesses often use accrual basis accounting to track revenue and expenses over the life of the subscription. SaaS accounting software is just one piece of the accounting puzzle for subscription businesses.

• These include customer management, HR, ecommerce, and inventory management.
• However, it may lack the advanced features needed by larger, more complex SaaS companies.
• With so many pressures of growing a SaaS business, worrying about the accuracy of your accounting is the last headache you need.
• But you should definitely be doing custom financial reporting, at the very least, to create a clear view of both GAAP and SaaS financial metrics.

It Improves a Painful Workflow for Your Team

It can make sense to choose a platform that closely matches your business model, particularly if you have no plans to expand your product offering. But in most cases, a comprehensive solution will be the most sensible bet. In small teams, the CFO or another senior financial figure may handle accounting. In larger teams, the job may fall to less experienced employees or those without a technical background.

Key Industries

In 2025, however, companies have refined their approaches, using market-driven data and internal pricing lists. The rise of SaaS has led to increasingly complex subscription models, often involving tiered pricing structures, AI-driven software modules and customized support packages. The challenge is to create a systematic approach to pricing individual components of these bundled contracts. Software and SaaS companies increasingly offer complex professional services tied to their software products, making this assessment more challenging.

How We Chose the Best Saas Accounting Software Solutions

As an example, many SaaS businesses have 80%+ gross margins and 40%+ EBITDA margins. For more on ASC 606 scenarios in SaaS, see my companion article on revenue recognition in SaaS. On the surface, accounting at a SaaS company may look like accounting at any other business. The following products are highlighted because they offer SaaS-tailored tools and rank highly on the Accounting Software TrustMap—a dynamic grid that measures TRScore and the interest of B2B buyers.

FreshBooks is designed for freelancers and very small businesses, offering a simple and straightforward platform. However, it may lack the advanced features needed by larger, more complex SaaS companies. QuickBooks Online (QBO) is a go-to for many small to medium-sized businesses, thanks to its user-friendly design. It integrates with many other business apps, connecting your financial data with other key operations. While QBO’s pricing is generally affordable ($17–$36 per month), its user limits could be a drawback for rapidly scaling companies. Anrok focuses specifically on sales tax compliance, a crucial aspect of spend management for SaaS businesses, helping you navigate the complexities of sales tax regulations.

All scaling SaaS businesses need a tool which manages subscriptions & recurring billing on one hand, and streamlines finance operations on the other. Chargebee makes recognizing, reporting, and staying compliant a breeze, while managing your recurring billing seamlessly. Implementation services often involve installation, integration, data migration and other professional services bundled together in a software or SaaS contract.

In our case and testing of cloud accounting services, we’ve witnessed how they can improve the decision-making process of businesses. This is possible as these tools automate various accounting operations, saas accounting prepare reports for you, and integrate with other business software. If your SaaS business has high bookings but lower billings, this can be a leading indicator of future cash flow problems.