AcctTwo Blog

Accounting systems that rely on manual processes, spreadsheets, and delayed reporting timeframes have no efficiency hacks. As SaaS and subscription businesses grow, their patchwork processes and accounting systems that worked so well in the past are now slowing business growth. Here are the five essential features to look for when considering startup software for your growing SaaS and subscription business.

The home services industry has arrived at a transformational moment. It sits at the confluence of major forces – the pandemic, a revolution in digital technology, shifting weather patterns, evolving social attitudes – that are changing how we occupy our homes. Coming years will see massive growth in the home services industry, along with equal disruption.

The team at AcctTwo has been closely involved with the leading home service software for years. We thought this was an opportune moment to explore the biggest issues affecting plumbing companies, HVAC contractors, home security installers and countless others, particularly from the perspective of the home services CFO. Anyone invested in this industry needs to be aware of what lies ahead – but especially the executives at the helm of accounting and finance. Why? Because the biggest changes and challenges apply to them.

Private Equity and Venture Capital firms with SaaS and subscription businesses in their portfolios face unique challenges in providing strategic financial guidance to their portcos, particularly new ones. Often, you'll find undeveloped internal controls and manual tracking methodologies that inevitably result in delayed, inaccurate financial data. In this blog series, we'll explain how investing in purpose-built, real-time private equity software solutions that are specifically designed for SaaS and subscription-based reporting and metrics can help PEs and VCs overcome these challenges and jumpstart growth.

Houston, TX and San Mateo, CA (September 8, 2021) – Three weeks after combining with Baker Tilly US, LLP, AcctTwo, a Value-Added Reseller (VAR) of Sage Intacct and a managed services provider with proprietary solutions for the powerful cloud-based platform, will sponsor and attend the SaaStr Annual 2021 conference in the Bay Area September 27-29.

One of our industry focuses at AcctTwo is the Software and Technology industry, specifically SaaS companies, which have very specific needs around subscription billing, customer relations, recurring revenue, and metrics.  We’ve learned over the years that the same need for SaaS business intelligence applies to just about any company that sells goods or services on a subscription basis. Sage Intacct, with its native Salesforce integration, subscription billing, revenue recognition, and contract management capabilities, has shown itself to be the ideal financial management platform for these fast-growing businesses, particularly when QuickBooks and Excel become too unwieldy to manage complex contracts and the metrics needed to run the business and to raise money for growth and expansion. 

With automation from AcctTwo’s SaaS Intelligence, Quest Analytics can now trust their data and easily see actionable insights that Excel wasn’t showing them to support their recent shift to a business model more akin to a Software as a Service company. Their team now has data-driven conversations at the executive and department level about subscription finance metrics, such as Customer Acquisition Cost and Customer Lifetime Value, and decide confidently where they need to focus their efforts to drive more growth.

At AcctTwo, we curate, integrate, and optimize the ideal technology stack for finance and accounting departments at midsize organizations. We do this through an industry lens and one of the key industries we focus on is the growing Home Services industry, which constitutes businesses whose main purpose is working on residential homes, though some of these also take on commercial business. This includes plumbing, HVAC, flooring, landscaping, concrete, moving and storage services, and more.

We’re seeing a growing home service industry trends where Private Equity-backed companies, or “platforms,” are consolidating local and regional Home Services businesses, keeping their business names, and making minimal changes to their staffs, but making major improvements in their technology and processes.

One of the primary challenges many SaaS and subscription businesses face is determining what metrics to track. While all B2B SaaS and subscription businesses are different, there are a handful of key metrics that most can benefit from to optimize performance, propel growth, and attract investors. We’ve outlined the metrics investors are looking at during each of the SaaS growth stages to see if you’re on track and to help you prepare for what’s ahead.

Culture is so important, and it doesn’t necessarily gauge intellect, instead it measures whether or not someone will be a good fit for your team and ensure that it is well rounded. Don’t overlook the cultural component to leadership succession planning – remember people work for people.

The annual and monthly recurring revenue is the driving force behind B2B (or B2B2C) SaaS and subscription-based businesses, but presents a unique set of challenges, particularly in the early and growth stages. While recurring revenue is integral to long-term financial health, early- and growth-stage businesses must establish cash flow and recapture startup and operational costs at a time when they may still be determining product-market fit. Measuring key SaaS metrics can provide critical insights into organizational health, help businesses optimize their sales and marketing, and ultimately position them for long-term growth.