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Accurate accounting is key to the success of any business. It allows you to keep track of costs and revenue in order to implement your business plan, while also giving you concrete numbers to show potential investors. While this might seem to go without saying, many in the competitive software-as-a-service (SaaS) field have failed to follow through with accurate accounting. For startups, this is a particular concern as you attempt to go from pre-revenue to bringing in profits. Agile Payments found that one of the main reasons SaaS startups failed was the failure to save financial resources because they didn’t know how much money they had or needed.

Luckily, accounting software has become a standard technology that SaaS startups can use to avoid this problem. But this poses a different problem: which accounting software should you choose? While there is no “one size fits all” choice and it will depend on your needs, two of the most used accounting software platforms in the SaaS industry are QuickBooks Online (QBO) and Xero.

The Importance of Cloud Accounting

Both QBO and Xero are cloud accounting software platforms. This means that your accounting will be 100% online rather than stored on a computer. This has a number of benefits over desktop solutions. Because desktop solutions are on a computer, they present a greater security risk both in terms of being hacked and in terms of theft. Cloud solutions are protected by state-of-the-art security systems and are not on-premises. Likewise, cloud solutions are constantly backed up and you don’t run the risk of losing your accounting data, which can happen through manual errors or system failures with desktop solutions. Finally, while desktop options are largely limited to the single computer they are on, cloud accounting software allows for easy accessibility to those who have permission. Relatedly, you can check cloud accounting software while on the go via your phone or other devices, whereas desktop solutions require direct physical access to the computer on which the accounting software is on.

Choosing Your Solution: QuickBooks Online vs. Xero

While QuickBooks Online and Xero are both cloud accounting software solutions, which of them is better for you will depend on compatibility with your needs. Here are some things to consider when making a choice.

1. Subscriptions

Xero offers three monthly subscription plans: Starter, Standard and Premium. While they all come with basic features and allow for unlimited users, Starter has usage limitations, including for quotes, invoices, and bills. Standard offers unlimited quotes, invoices, and bills. On top of these unlimited features, Premium includes foreign currency transactions and project and expense management. 

QBO also offers three monthly subscription plans: EasyStart, Essentials and Plus. While there are no limits on usage, as you move up the scale different subscriptions offer increased user capacities and more complex features, such as accelerated invoicing and enhanced reporting and tracking. 

Aside from feature sets, the biggest difference lies in the price ranges: Xero ranges from $15 to $52 per month; QBO ranges from $20 to $60 per month. But price isn’t everything. What really matters is figuring out which feature set will best suit your needs.

2. Setup 

Once you’ve selected which software and subscription you prefer, both offer easy setup and provide customizable dashboards so that you can organize it in a way that best fits your needs. However, before you sign up for a subscription you need to check whether they are supported by your bank. If they aren’t, you won’t be able to integrate your bank accounts with the software and there will be no reason to purchase a subscription.

3. Functionality 

Much like choosing a subscription, functionality will depend on your needs and your expertise. QBO is an older platform and was designed for people with accounting backgrounds. While you should obviously have accountants doing your accounting, if you take a collaborative approach and want you or your team to have some oversight with accounting software, there can be a steeper learning curve. At the same time, its advanced reporting and tracking tools are exceptional. 

Xero is a newer platform and designed in a way that is more user friendly for non-specialists. This makes the learning curve less steep and allows for easier training when it comes to things like invoicing, which may be done by members of your team other than accountants. But it can also mean limitations in terms of advanced features.

4. Integrations 

Your cloud accounting software needs to interact with the other platforms and tools you use, whether it’s payroll, payment, or any other software. Both QuickBooks Online and Xero offer a growing number of integrations, with Xero providing, at the time of publication, more integrations. Of course, raw numbers don’t matter. You need to make sure the integrations they have work with the software solutions that you depend on.

4. Scalability

You want to choose software that will grow with your business. Migrating to another platform because your accounting software can no longer handle what you need is costly and time consuming, as well as rife with the possibility for problems. QBO offers a great solution for small businesses hoping to expand to the Enterprise level. However, Xero has increasingly become the choice for startups, as it can cater to mid-market companies with up to 1000 employees. 

Live Accounting with NOVAA

Even if you’ve narrowed down your cloud accounting software choice to QBO or Xero, the choice isn’t easy given the different subscriptions and features available. This is why it’s best to consult experts so you can best assess your accounting needs and which solution suits them.

At NOVAA, we are accounting experts and are certified by Xero with Silver Partner status, and as QuickBooks Online certified ProAdvisors. Regardless of which cloud solution you choose for your business, we provide “live accounting” for our clients. Unlike many accounting firms that wait until the end of the month or year to update your books, we update them daily so that you have live access to your accounting data. That means that you can login to your account and look at accounting entries as they happen, assuring ease of use and access to all of the information you need to run a successful SaaS startup.  

For more information on NOVAA’s live accounting services for QuickBooks Online or Xero, book a free consultation.

Recurring subscriptions are the norm for SaaS services. They allow customers to manage costs by paying on a recurring basis as they continue to use the service. But billing can be a major pain point for business-to-business (B2B) SaaS companies. They have to manage subscriptions across different pricing tiers and customer lifecycles, while also collecting payment through a variety of providers. Fortunately, state-of-the-art management subscription software, like SaasOptics, Recurly, and Stripe, offer a solution to these pain points. Top notch subscription software not only allows your B2B SaaS company to manage and automate subscriptions, but also provides you with advanced analytics that can be used to assess your marketing and sales efforts. Here are what we think are the most important attributes to look for in a subscription management solution that will scale with your business. 

Automation and Efficiency: You Want to Set it and Forget It

The most important aspect of subscription management software is the ability to automate your payment processes. Automation eliminates the need for your accounting department to manually deal with subscriptions across customer lifecycles. This can be overly complex and subject to human error, particularly when you have a tiered pricing system that may include free trials. If your business is growing then you don’t want to wait to invest in a robust subscription management solution. The longer you wait, the more complicated it will be to migrate away from legacy software or spreadsheets, which can create bottlenecks in the migration process and efficiency of your billing system.  

The right subscription management software allows you to automate the entire billing process, while also customizing it so the software efficiently serves your business plan. 

4 Benefits of Automated B2B Subscription Management Software

  1. It saves your catalogue and pricing, allowing customers to customize their subscription, including giving them the option to upgrade or downgrade their subscription. You can also use the software to test different price points and offer discounts and promotions.
  2. It stores customer information and manages billing and payment, including integrating with different payment gateways. This also means the software automatically contacts customers for payment failures or declined credit card payments, which are a major source of lost revenue in manual processes.
  3. It scales as you scale, avoiding the hassles that come with migrating data from legacy systems.
  4.  It provides PCI compliance. Customer payment information data needs to be encrypted and protected in accordance with regulatory compliance expectations. With manual processes, encryption is both more complicated and more expensive. Most management subscription software is PCI compliant out-of-box.

Leverage Data for Marketing, Sales, and Investors

By automating the process, subscription management software let’s you take a hands-off approach to billing and payments. But you still want to keep your eyes on the data that is produced through the software and integrate it with your other management software, including customer relationship management (CRM) and other analytics software. By doing so, you can gain key data insights, including:

  • How many subscribers you have
  • Your churn rate
  • How long subscribers are subscribing for
  • How many customers are converting from free trials to subscriptions
  • Basic demographic information about who your customers are

While the most common blocker to using subscription management software is the fees, consider this an investment. The type of data you gain is key when it comes to analyzing and assessing the success of your marketing and sales outreach efforts. Subscription data allows you to re-assess these outreaches and improve your conversion rates. Under the subscription model, subscribers are key and this data can help expand your subscriber base. 

Additionally, once companies start to grow, potential investors and other stakeholders want to look at key trends, like customer growth, before they’re willing to back your company. Subscription management software makes it easier to provide comprehensive subscriber data and growth projections to potential investors.

NOVAA’s B2B Subscription Management Software Solutions

As SaaS has exploded, so have subscription management software solutions. This presents the problem of figuring out what solution is best for you. Moreover, you need to customize the software to fit your needs. This is so the automating functions work without constant oversight and you continue to collect data that can help to assess your marketing and sales and have data ready for potential investors.

NOVAA provides experienced management consulting for precisely these purposes. Whether it’s SaaSOptics, Recurly, or Stripe, we have the expertise to help you figure out which solution is best for you based on your needs and the different feature sets they offer. Once we’ve helped you select your software solution, we set it up with customizations to fit your goals. This establishes a baseline for all of the automated features. Finally, we integrate the subscription management software with your existing software solutions so that all of the components of your organization are in communication with one another and providing you with the data that is necessary to help realize your business goals. 

Contact us for more information on how subscription management software can help you realize your business goals.