Software (SaaS) companies face many challenges that are unique to the industry. In particular, the pace of advancement is accelerated, pricing models are much more diverse, security is an ever-present consideration, and scalability is key. Using an ERP designed for software companies can help ease these rapid-fire challenges and give you more time to spend on strategic growth activities.

ERP Solves Software Company Pain Points

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  • Manual Processes

    Software companies still relying on traditional ERP systems are forced to use error and time heavy spreadsheets, manual work and standalone functional solutions. As your enterprise scales at a fast pace, keeping up with the increase in customer accounts and subscriptions can become impossible with manual processes. Automation of business operations is a critical element for business success. A modern ERP solution designed for software companies can organize and automate your operations in a truly effective manner.

  • Need for Integration

    For SaaS companies there is a need for specific business software that integrates well and automates processes across entities, locations and business functions. Many SaaS businesses have to create complex strategies to balance multiple solutions that do not cater their unique challenges. With an ERP for software enterprises, you can have custom, API, certified, or partner integrations that help solve data siloing challenges.

  • High Churn Rate

    Many scaling SaaS businesses experience a high churn rate. While the total number of customer accounts may be rising, retention percentages may drop. Unfortunately, many software businesses do not find out why their customers are leaving contracts, making it even harder to solve this challenge. An ERP that integrates with all your other systems can provide more data on customers than can be found in just one platform. With real-time insights and dashboards you can spend more time connecting with and retaining customers.

  • Inaccurate Revenue Recognition

    For software companies looking to scale and attract investors or buyers, revenue recognition is key. Accurate revenue recognition is needed to remain compliant with Generally Accepted Accounting Principles (GAAP), including the ASC 606 standard. ERP for SaaS companies have software that can automatically recognize revenue, track and report due diligence data, and smooth the scaling SaaS business journey.

Benefits of an ERP for Software Companies

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  • Subscription & Contract Billing Features

    The complexities surrounding subscription and contract billing can require countless hours of tedious manual calculations and management for your team. With an integrated ERP system you can eliminate this time consuming task with built in tiered payments and billing for your customers based on usage, milestones and varying subscription terms and lengths so you can automate the billing process based on your specific requirements.

  • Real-Time SaaS Metrics

    SaaS businesses rely heavily on metrics such as Committed Monthly Recurring Revenue (CMRR), Customer Acquisition Cost (CAC) and Churn to pinpoint areas of improvement and opportunity. Modern ERP software can capture all of your critical metrics in an automated dashboard including performance cards, reports, charts, and graphs, giving you access to the real-time information without having to make manual calculations or updates so you can track and identify trends.

  • 360-Degree View of Business Operations

    No matter what your technology or service is, a customer may need to make a change in their order. With an ERP properly designed for software companies, client changes can be handled seamlessly with a 360 degree view into your entire business. Everything from sales, customer service, planning, accounting, production, distribution and HR can all be integrated and shared across all levels.

  • Leading API Integration

    Minimizing the manual re-entry of data into multiple systems is a critical step in preventing your data from being riddled with errors, missing entries and duplicates. The ultimate solution to this problem is having the ability to integrate your different systems so data can flow freely between them. ERPs for SaaS businesses can provide leading API integration allowing it to connect with your other business systems, as well as new systems you may want to add in the future.

  • Integrated Financial Management Platform Designed for Scalability

    Cloud software is designed for scalability offering both a core financial suite and advanced functionalities for enterprises ready to extend their financial software. In addition, Cloud ERP platforms can connect seamlessly with other business systems through pre-built connections offered in its marketplace. Plug and play integrations can range from Accounts Payable (AP) applications to Customer Relationship Management (CRM) solutions.

  • IT Cost Savings with Automatic Updates and Advanced Security

    True Cloud ERP platforms can help mid-market enterprises cut IT costs. With on-premise ERPs, IT teams are typically responsible for implementing custom codes or scripts, upgrading costly hardware and updating software, running backups, and ensuring their data is secure. When an enterprise deploys a Cloud ERP, the platform can update automatically on a quarterly basis without disrupting business processes. Cloud ERP for SaaS companies also come with built-in advanced security features to protect confidential data.

Software (SaaS) Industry Resources

The 5 Questions SaaS CFOs Should Ask Their Controller

As the office of the SaaS company controller becomes ever more strategic—creating higher levels of financial visibility to help drive growth and profitability—the financial organization’s relationship to the controller role must evolve as well.

Download this whitepaper to find out what questions you should be asking your controller to initiate a conversation around best practices for your software business.

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