When SaaS businesses are held back by their own software

SaaS businesses may be all about innovation – but their rapid growth can leave their finance teams bogged down in some distinctly old-fashioned processes.

Cloud accounting business iplicit has drawn on the expertise of its own Financial Controller, Andy Jackson, to help guide software businesses that are struggling with the limitations of their old systems.

In the first in a series of blog articles for iplicit, Andy tells of his own experience moving on from on-premises software and entry-level cloud systems.

“While entry-level software will handle transactions pretty smoothly and produce a basic set of reports, it won’t tailor reporting to your requirements. And it can’t automate complex tasks like revenue recognition, which are a core part of a SaaS company’s work,” he writes.

The limitations of those systems require finance teams to do a lot of error-prone work in spreadsheets.

“I hadn’t used iplicit until I worked for iplicit. It was an eye-opener,” Andy says.

iplicit is like its customers

iplicit serves SaaS businesses that need to move on from entry-level cloud solutions but can’t afford the upheaval and expense of large-scale ERP packages.

“iplicit is in a pretty good position to know about the challenges facing fast-growing SaaS businesses because it’s one of them,” Andy writes.

“Like most SaaS businesses, we handle a large volume of deferred income revenue recognition and prepayments. For many of those companies, there is no way of leaving this kind of work to the finance software. You either have to use third-party applications or use Excel. 

“iplicit, however, makes time-consuming tasks like accounts payable simple.

“At iplicit, AP would take forever without automation. But thanks to built-in OCR and machine learning, it’s all done directly in the finance system. 

“That said, we accountants will always want to tinker with data in spreadsheets, and iplicit allows for that. You can extract data into Excel and refresh it there so you’re always working with up-to-date information. You can’t easily do this with entry-level and legacy systems.” 

Cutting month-end in half

Andy recalls aiming for a 10-day month-end in a company similar in size and complexity to iplicit. At iplicit, the process takes five days – three or four of which are taken up by gathering purchase invoices and getting them into the system.

The big factor behind the accelerated timescale is the ability to automate deferred revenue calculations.

“In iplicit, I just take an invoice, select the revenue recognition profile I need, and everything then flows through the system automatically,” Andy writes. 

“We track KPIs like net revenue retention, churn, new bookings, logos, and marketing payback. We run queries, with iplicit, that populate Power BI or Excel. Setting up dashboards took half a day, and now it’s as simple as refreshing each month.” 

Andy says he could have saved a lot of time in previous businesses if he had software like iplicit.

“If you’re spending countless hours in spreadsheets and doing calculations the old-fashioned way, something is holding your business back,” he says.

Read Andy Jackson’s thoughts in full on iplicit’s blog.