Why your SaaS company needs subscription billing software
With the swift rise in cloud technology came a business model that previously was more often associated with industries like print publishing and membership groups: recurring subscription billing. While the new model can be seen throughout most industries, at the forefront of this shift are companies that offer Software-as-a-Service (SaaS).
Companies outside the SaaS industry may still need to manage recurring billing and contract payments. Many modern ERPs, like Sage Intacct, have a solution for simple recurring revenue contracts, processed through the Order Entry functionality.
However, if you are a SaaS company, you may have more complicated contracts in place. Sage Intacct’s Contract Subscription and Billing module is the perfect solution for those in SaaS companies that need advanced features and heightened analytics on where their revenue comes from, what is working, and what is not. The solution also makes compliance with IFRS 15 and ASC 606 Revenue Recognition standards stress-free.
What counts as ‘complicated’?
Well, anything that goes beyond a set amount, at set intervals, for a set period of time. For example, if you offer add-ons. Using the Order Entry method, there is no specific method of adding to the contract transaction, meaning you need to add a new line item to bill appropriately. However, in Contracts, add-ons are easy to manage as part of the many contract templates available out-of-the-box.
Similarly, if you allow upgrade, downgrades, variable term renewal or early renewal, these would require diligent care of multiple line items, causing a headache for your accounts and finance team. Within the Contracts module, contract rules and clauses can easily be edited in a single place, at the touch of a button.
If your SaaS offering is based on metered usage, then you may currently be relying on manual, complicated formulae to bill based on usage levels. However, usage levels can be defined and automatically calculated with Contracts.
One of the most beneficial parts of the Contracts module is that all of this administration, renewals, and invoicing are automated. You can accelerate your quote-to-cash process by up to 30%, meaning you have more cash on hand to grow your business.
What about compliance?
Sage Intacct excels at reports using real-time data. This has 2 key benefits when it comes to managing complicated subscription billing contracts – a single source of truth that can help you see and understand where your finances are at, and an automated method of revenue recognition that takes the sting out of ASC 606 and IFRS 15 compliance regulations. When you tie billing to revenue recognition, your compliance measures take care of themselves. Advanced tagging lets you get a truly granular view of where all of your revenue comes from. Intacct uses dimension values as opposed to old-fashioned account segments, meaning you have much more control of how reports can be broken down.
There is no need to custom-create the reports you need, either. They’re all pre-built, lending themselves to agility & speed.
It goes beyond a presentation of past transactions, leveraging the data you do have to forecast what is coming up, even if there is no GL entry this year, you can see what’s committed and where your cash flow is at all times. If you’re on the path to IPO, or are looking for investors for your business, cash predictability is a crucial metric for informing those investors, something easily found in your Sage Intacct dashboard.
How does Sage Intacct compare to other subscription billing platforms?
Intacct’s Best-in-Class commitment means that you get award-winning core financials with applicable solutions built on top of it, creating a bespoke system that shines in all areas. We are not the only ones who think so. In fact, G2 – a widely celebrated peer-to-peer review site – puts Sage Intacct alongside leaders like SaaSoptics and Chargebee in their mid-market grid report for subscription management. It is the only accounting software on the Grid, quite an achievement!
If you use Salesforce CRM, you can leverage the tight integration between Sage Intacct Contracts and Subscription Billing and Salesforce. This allows information on contract terms to be added to accounts in Salesforce. Keep billing templates and subscription schedules in your financial system, while giving salespeople complete visibility into billing and payments info. Sage Intacct ensures everyone’s up to date on your financial relationships with customers.
The SaaS industry has shaken up many of the old rules with historic IPOs and previously-unheard-of growth rates. They’ve always been at the fore. Sage Intacct gives subscription billing tech companies the kind of granular, high-value information they, and their investors, need to continue the stratospheric rise of the industry.
To learn more about Sage Intacct, Contracts and Subscription Billing and how it can revolutionize your SaaS company, get in touch to schedule a free consultation with our expert team.