SaaS and IT services development/companies operate in a new and exciting world where the traditional mechanisms for measuring success no longer apply. The traditional P&L and Balance sheet become a static reporting mechanism replaced by new-age concepts:

  • CAC – Client Acquisition Costs
  • Recurring income
  • Customer churn
  • Revenue churn
  • MRR – Monthly Recurring Revenue
  • ARR – Annual Recurring Revenue
  • ACV – Annual Contract Value
  • LCV – Lifetime Contract Value

Recurring income is the ultimate measure of success for SaaS and IT Services companies. The growth rates and retention of recurring income is a great indicator of future cash flows. Research has shown that SaaS and IT Services companies that have high recurring income growth rates with good customer retention achieve higher market valuations.

With so much importance placed on recurring income and subscription billing, as SaaS and IT Development and services companies grow the focus should be on automation of the quote to the cash billing process. The challenge is that the subscription billing process for software companies can be complicated:

  • Annual and monthly billing cycles
  • Upsell, cross-sell, downgrades
  • Milestone billing
  • Tiered pricing
  • Customer-specific billing
  • Usage-based invoices
  • Do and charge services billing
  • Included units invoicing
  • Contract billing
  • Recurring billing with variables

Clearly, this is not your typical quote to cash accounts receivable billing cycle. So, let’s stop trying to implement standard accounting software solutions to cater for complex contract and subscription billing – bending and twisting software solutions to try and cater for the challenges of automating subscription billing.

Sage Intacct has subscription billing functionality built specifically for the contract/subscription billing industry sectors. As SaaS and IT development businesses grow, the requirement to automate and streamline the quote to cash process becomes increasingly important. Sage Intacct offers functionality to help companies manage the customer lifecycle:

  • Manage complex billing cycles
  • Revenue recognition
  • Automated billing
  • Expense and revenue matching through the customer lifecycle
  • Bi-directional synchronisation with SalesForce
  • Automate customer renewals
  • Data analytics to review SaaS metrics
  • Real-time billing forecasts
  • SaaS data dashboards

Your corporate accounting team can automate manual calculations and customer contract/billing renewals to achieve real business outcomes:

  • Increased cash flow
  • Better customer service
  • Less customer churns
  • Time and money saved through automation

Revenue recognition can be automated to recognise revenue as and when the business provides the service and has performed to the contracted terms.

Sage Intacct provides bi-directional synchronisation with SalesForce to assist with all aspects of the customer lifecycle – from CRM, opportunity through to contract creation, billing and cash collection. Automation to streamline your business.

Sage Intacct offers strong financial management beyond pure subscription billing with a strong chart of accounts, dimensions for additional analysis, multi-company / inter-company, consolidations, fixed assets, budgeting and financial reporting.

Sage Intacct is a cloud-first solution that can be deployed in relatively quick timeframes to help you achieve a quick ROI. If you want to know more about Sage Intacct and subscription/contract billing, contact the team at Leverage Technologies on 1300 045 046.