Article FinOps and Accounting in Excel and Alternatives for Subscription Revenue Management
Is Excel still your go-to tool for B2B SaaS financial accounting?
You wouldn’t be alone… Excel has long been the Swiss Army knife tool for accountants and controllers performing revenue recognition and closing the books.
In this article, you’ll learn the limitations of using Excel for accounting tasks and explore alternative solutions you’ll love.
Reasons Why Manual Spreadsheets Are Still Pervasive, Despite Risks
If your company uses Quickbooks Online, you’ve really not had much choice but manual spreadsheets if you wanted to create a revenue schedule.
Requests for data and particularly for deferred revenue can create hours of work and rework. Luckily, this headache is now over!
TrueRev software now syncs with a click to Quickbooks to allow for real-time revenue recognition and financial SaaS metrics.
Limitations of Excel in Accounting and Financial Operations
Quickbooks just wasn’t designed to make subscription-based revenue easy (or even realistically possible).
Using Excel also carries big risks: inevitable data entry errors, formula failures and of course… simple user errors. Here’s the most common problems:
1. Complexity and Error-Prone Processes: Excel spreadsheets become complex and challenging to manage over time. It just happens. This increases the likelihood of errors in revenue recognition and other accounting tasks. Manual data entry and formula creation contribute to this risk.
2. Lack of Scalability: As SaaS businesses grow, subscription revenue management becomes more intricate. Excel can struggle to handle the increasing volume of data and complexity of financial operations.
3. Limited Collaboration and Version Control: Excel's collaboration features are limited. Like, really extremely limited. This makes it difficult if not impossible for accounting teams to work simultaneously on spreadsheets. Version control issues are a constant problem.
All this hinders the efficiency of closing the books. It also makes the job of the accountant or controller annoying and unpleasant, to say the least.
Excel Alternatives for Subscription Revenue Management
If you were to list your top wishes for what a subscription-oriented revenue management solution might do, you would probably include:
Enterprise Resource Planning (ERP) Systems: ERP systems streamline accounting processes by integrating multiple functions, including revenue recognition, billing, and financial reporting. They provide a centralized platform for managing subscription revenue and offer scalability for growing businesses.
While these big systems are packed with features, software company finance teams often get overwhelmed by the complexity they face in setting up and maintaining them properly. ERPs are often stuffed with “feature-creep” features that most SaaS companies have no time to take advantage of. The result is often more financial confusion and expense than less, when simple real-time clarity is all that is really required.
Revenue Management and Subscription Billing Platforms: Dedicated revenue management and subscription billing platforms automate complex revenue recognition calculations and provide comprehensive insights into subscription metrics. These platforms enhance efficiency and accuracy in managing subscription revenue.
A great example of this is TrueRev, which allows for enterprise-grade subscription & revenue management that’s easy to setup and priced for SMBs with a free 14-day trial. Software company financial professionals should think twice before opting for expensive, difficult to master systems that are really meant for large enterprises only. Once down this path, is is very painful and expensive to turn around.
Considerations for Adopting Excel Alternatives
Functionality and Integration: Evaluate the features and capabilities of alternative solutions, ensuring they align with your specific accounting and financial operations requirements. Look for seamless integration with existing systems to streamline data transfer and enhance efficiency.
For example, TrueRev integrates seamlessly with Quickbooks Online with just one click. Thereafter, you are fully synced, so your TrueRev data is always up to date.
Scalability and Growth Potential: Consider the scalability of the chosen solution to accommodate your business's future growth and evolving subscription revenue management needs. Look for tools that can handle increasing data volume and complexity.
For B2B SaaS companies under $20M ARR, there’s no need to upgrade to expensive enterprise-level software like Maxio with complex features that are rarely used. TrueRev is purpose-built for B2B SaaS so it includes just what is required and no more.
Training and Support: Assess the availability of training resources and support provided by the software vendor to facilitate a smooth transition from Excel to the chosen alternative. Adequate training ensures that your accounting team can effectively utilize the new solution.
TrueRev has an onboarding service for companies with a large amount of customers and/or contracts. Most companies are up and running on the very first day with excellent ease of use by every member of the team.
To make sure clients can always reach TrueRev support, the company has a client chat that is seen by every member of the team, allowing for rapid and expert response to requests.
Conclusion: The Future is Real-Time with TrueRev
It’s time to step away from manual drudgery and the risk of unknown errors and put integrated financial automation in your corner!
Excel has traditionally been a popular choice for accounting and financial operations.
It still remains great software. We’ll be using it for many years to come for something else.
But for subscription revenue management, business now demands more sophisticated tools to overcome limitations and improve efficiency.
SaaS financial professionals need real-time access to vital financial metrics like MRR/ARR, churn, bookings, cash flow, new deals, upgrades, cancellations and expansion.
By exploring alternative solutions such as cloud-based accounting software, ERP systems, revenue management platforms, and financial operations management software, businesses can streamline revenue recognition, improve financial reporting accuracy, and enhance the efficiency of closing the books.
Embrace modern alternatives like TrueRev that offer scalability, automation, and real-time insights. It will empower your accounting and finance teams to effectively manage subscription revenue, generate helpful SaaS metrics and drive financial success.
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