Article Unlocking Efficiency: The Case for Automating Revenue Recognition in B2B SaaS
You’ve decided… your B2B SaaS company is ready for an automated, real-time revenue subledger like TrueRev.
But… what if your CEO isn’t convinced you need it?
You are not alone. Expert accountants, controllers and even CFOs are often asked to articulate the value of financial analysis tools to others in leadership.
It might not be obvious to them how much close, detailed work is involved in closing the books or how much effort goes into producing a key financial metric on the fly. It is your job to make it look effortless.
If you are doing a good job already, it can be a challenge to explain the reasons for automating deferred revenue and billing.
The best reason is: automated revenue recognition minimizes financial operations costs while increasing accuracy.
Automating Revenue Recognition Cuts Costs and Boosts Accuracy
There is a big difference between managing 20 client contracts and doing the same with 200 contracts!
The complexity of renewals, one-time charges and monthly billing will swamp any financial operations team once a successful business begins to scale.
Many companies start out with a set of systems that do the job at first. Over time, these siloed data systems don’t communicate well – so getting to “one source of truth” for accurate financial analysis quickly gets hard.
A set of Excel or Google Sheets, no matter how well constructed, begins to collect little errors and mistakes that add up to big, unwelcome surprises down the road.
Adding more team members to handle more manual work is not sustainable. However, automation can:
- Bring all your financial revenue data into one place with 100% accuracy
- Create invoices and journal entries at a click
- See financial SaaS metrics in real time, any time
Automation of this level removes hours of work from the process of closing the books, while also ensuring laser-sharp accuracy.
Accountants and controllers are most valuable when they are looking at accurate numbers – not keying in numbers manually.
Automation is the answer to ensure complete GAAP accuracy and peace of mind for your entire accounting team.
Quickbooks Online and CRMs Have No Revenue Subledger
Everybody loves Quickbooks, especially small to medium B2B companies.
This is where many B2B SaaS companies start out – with just a general ledger like Quickbooks and a CRM. However, these tools are not built for everything B2B SaaS companies need to get financial clarity.
Not to mention, that’s two separate siloed systems that your leadership needs to be familiar with to get data they might need. Interfaces they might not understand. Settings they might mess with.
Creating revenue schedules manually in Excel is always a time consuming and error-prone process. It just gets harder every month, with each new client that is added.
What you need is a revenue subledger: a financial operations system that will give you and your leadership team accurate GAAP revenue recognition and provide useful financial SaaS metrics in real-time.
This sounds great to a financial professional, of course, but how to show the value of this concept to other company stakeholders?
Seven Reasons to Add TrueRev to Quickbooks Online
If your CEO is curious why you need TrueRev.com when you've already got Quickbooks Online, try this list of seven reasons to consider:
- Quickbooks Online isn't a subscription management solution, so it lacks vital SaaS-oriented revenue features
- Quickbooks Online doesn't do anything with customer contracts. There's no concept of tracking start dates/end dates/renewals so you can bill correctly.
- Quickbooks Online doesn't track booking values so you can see total contract value by customer, product and contract.
- Quickbooks Online doesn't provide GAAP revenue recognition to stay compliant with ASC 606 or show complete deferred and unbilled revenue details.
- Quickbooks Online doesn't calculate MRR/ARR at the product (or any) level to show where growth and churn are happening.
- Quickbooks Online doesn't track or calculate any SaaS metrics whatsoever to keep you in control of your revenue.
- Quickbooks Online doesn't create billing schedules so you can ensure all invoices go out on time and you never miss sending one again.
Quickbooks is a great solution for many things, but... it just doesn't allow for the kind of revenue recognition and financial metrics that B2B SaaS requires.
Step Up to a Financial Operations Platform Designed for B2B SaaS
If you have a subscription-based B2B SaaS business, and use Quickbooks Online, you deserve the power and clarity of a true revenue subledger like TrueRev.
Still have questions from your CEO or other stakeholders? We’re glad to answer them, or feel free to set up a demo and we can demonstrate its full power for you.
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