When acquirers dig in, your shortcuts surface. Here’s what breaks first—and how to fix it before it costs you.

A founder recently reached out in a bit of a panic.

A couple of years ago, he evaluated several tools to manage revenue recognition for his SaaS business. In the end, he chose to stick with QuickBooks' newer rev rec features. It seemed “good enough” at the time—and to be fair, it worked for basic needs. But QuickBooks isn’t a revenue management platform. It isn’t a subscription management platform either. And therein lies the problem.

Fast forward to today: he’s deep into M&A discussions. Two serious buyers. They want clean, defendable ARR. They want deferred revenue broken out properly. They want retention and churn numbers that map back to contracts. They want confidence in the numbers, because they're using them to negotiate the deal—and decide whether to close it at all.

Now he’s scrambling.

What was once “good enough” is no longer even close. He’s digging through old spreadsheets, trying to backfill data, correct revenue schedules, and piece together metrics. It’s not just stressful—it’s risky. It could derail the deal entirely or, more likely, drag things out and kill momentum. In M&A, momentum is everything. The longer it takes, the more doubt creeps in. The more your narrative is questioned.

This isn’t an isolated case. We’ve seen it before—more times than we can count.

The pattern is always the same:

• The company grows.
  
  
• The metrics get more complex.
  
  
• Someone in finance flags concerns.
  
  
• Then a deal shows up, and suddenly, it’s a fire drill.
  
  

Here’s the uncomfortable truth: for B2B SaaS, everything starts with the contract. Every metric that matters—ARR, retention, expansion, deferred revenue, billings—all flows from the terms in those agreements. If you don’t have a system that captures that logic properly from day one, you’re laying a shaky foundation. You might not see the cracks until the roof starts to fall in.

And there’s more of this coming.

Analysts expect a surge in SaaS M&A over the next 12–24 months as market conditions normalize and private equity gets more aggressive. If you're still duct-taping together revenue data when the term sheet lands, you're not ready. Denial won’t save the deal. Procrastination will kill it.

It’s tempting to go with whatever seems simple at the time—especially when budgets are tight and investor pressure is high. But shortcuts in finance come with a price. One you often can’t afford to pay later.

You don’t want to be the founder trying to rebuild your numbers under a microscope.

You want to be the one calmly opening a clean report and saying: “Here’s everything you asked for.”

When the Bandage Falls Off: Why M&A is the Ultimate Stress Test for Your Rev Rec Stack

A founder recently reached out in a bit of a panic.

A couple of years ago, he evaluated several tools to manage revenue recognition for his SaaS business. In the end, he chose to stick with QuickBooks' newer rev rec features. It seemed "good enough" at the time—and to be fair, it worked for basic needs. But QuickBooks isn’t a revenue management platform. It isn’t a subscription management platform either. And therein lies the problem.

Fast forward to today: he’s deep into M&A discussions. Two serious buyers. They want clean, defendable Annual Recurring Revenue (ARR). They want deferred revenue broken out properly. They want retention and churn numbers that map back to contracts. They want confidence in the numbers because they're using them to negotiate the deal—and decide whether to close it at all.

Now he’s scrambling.

What was once "good enough" is no longer even close. He’s digging through old spreadsheets, trying to backfill data, correct revenue schedules, and piece together metrics. It’s not just stressful—it’s risky. It could derail the deal entirely or, more likely, drag things out and kill momentum. In M&A, momentum is everything. The longer it takes, the more doubt creeps in. The more your narrative is questioned.

This isn’t an isolated case. We’ve seen it before—more times than we can count.

The pattern is always the same:

• The company grows.
  
  
• The metrics get more complex.
  
  
• Someone in finance flags concerns.
  
  
• Then a deal shows up, and suddenly, it’s a fire drill.
  
  

Here’s the uncomfortable truth: for B2B SaaS, everything starts with the contract. Every metric that matters—ARR, retention, expansion, deferred revenue, billings—all flows from the terms in those agreements. If you don’t have a system that captures that logic properly from day one, you’re laying a shaky foundation. You might not see the cracks until the roof starts to fall in.

The M&A Landscape: A Surge in SaaS Acquisitions

The SaaS M&A market is experiencing significant activity. In Q3 2024, deal volumes increased by 20.5%, reaching 594 deals.

Private equity firms continue to lead SaaS acquisition activity, accounting for 57% of deals in 2024, while strategic buyers represented 42%.

Moreover, SaaS companies with a Rule of 40 score above 60 traded at an average premium of 200% compared to underperformers in Q2 2024.

Founder Readiness: The Key to a Successful Exit

Positioning your business for a potential sale involves demonstrating resilient growth, maintaining clean financials, and staying up to date on industry trends. This helps ensure that your SaaS firm is attractive in a competitive M&A landscape.

It’s tempting to go with whatever seems simple at the time—especially when budgets are tight and investor pressure is high. But shortcuts in finance come with a price. One you often can’t afford to pay later.

You don’t want to be the founder trying to rebuild your numbers under a microscope.

You want to be the one calmly opening a clean report and saying: "Here’s everything you asked for."

Why M&A is the Ultimate Stress Test for Finance Stack

A couple of years ago, a founder reached out. Like many early-stage SaaS leaders, he was looking for a revenue recognition solution. After evaluating a few platforms, he opted for QuickBooks’ then-new revenue recognition module—at the time, it seemed good enough.

Fast forward to this week: the same founder called again, but this time with urgency. His company has two serious acquisition offers. But there’s a problem—neither buyer is confident in his financials. They’re asking for defendable ARR, provable deferred revenue, and reliable SaaS metrics. And QuickBooks, well… it just can’t deliver.

Why QuickBooks Isn’t Enough for SaaS Revenue

QuickBooks Online (QBO) is a solid small business accounting tool. But it’s not a revenue management system—and definitely not built for SaaS. If you’re looking to:

• Track revenue across products, geographies, or channels
  
  
• Recognize revenue from mid-period starts
  
  
• Handle contract modifications
  
  
• Produce real-time SaaS metrics
  

…then QBO falls short.

All Metrics Start With the Contract

ARR. CAC payback. LTV. Churn. Expansion.
They all stem from your customer contract and the data within.

If your system doesn’t track:

• When the contract started
  
• What was sold (term, pricing, billing)
• Total contract value by products
  
• How it was invoiced
  
• When and how revenue should be recognized

…then your metrics are just spreadsheet math held together by assumptions.

And during M&A, assumptions kill confidence. Buyers don’t want a story—they want a system they can audit and trust.

M&A Doesn’t Wait for You to “Figure It Out”

Momentum is everything in a transaction. Delay kills deals. It adds doubt. It invites re-pricing.

That founder? He’s scrambling now—backfilling revenue schedules, building ARR from scratch, and fielding increasingly detailed buyer questions. The deal might still close, but the uncertainty could’ve been avoided with the right systems in place from day one.

The SaaS M&A Wave Is Coming

According to SEG’s 2024 Software M&A report, SaaS acquisition volume is projected to rise 25% over the next 12–18 months, driven by consolidation and private equity’s appetite for recurring revenue.¹

SaaS founders need to ask: If a buyer came knocking tomorrow, could we hand them reliable metrics?

A great article by our friend Ray Rike goes into some details here:  https://www.linkedin.com/pulse/saas-ma-volumes-valuations-2024-review-2025-predictions-ray-rike-jn0xe/ 

Stop Thinking Like a Bookkeeper. Start Thinking Like a Buyer.

If you’re still managing core financial metrics in spreadsheets and basic tools, ask yourself:

Would you buy your company based on your current numbers?

Your finance stack isn’t just operational—it’s strategic. The tools you choose today are the foundation of your valuation tomorrow. So choose accordingly.

Final Thought: 

Founders often delay implementing proper financial infrastructure because “things aren’t that complex yet.” But metrics built on short-term fixes will fail the moment they’re stress-tested. And in M&A, everything gets stress-tested.

Better to be ready years too early than a minute too late.

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