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Unearned Revenue: What it is and What it Means for Subscription Businesses

Stax

The concept of unearned revenue can easily trip up SaaS companies that offer subscription services and products on a recurring basis. Unlike when selling ordinary products, you cannot recognize the revenue earned from a subscription all at once. So, what differentiates ‘earned’ versus ‘unearned revenue’?

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What Is Working Capital?

Baremetrics

Cash equivalents are those items that can be turned into cash immediately, such as marketable securities (i.e., Accounts Receivable: This particular journal is only used under the accrual accounting system and not the cash accounting system. For a SaaS business, the deferred revenue category is particularly important.

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SaaS Financial Audits: 5 Tips for a SaaS Company's Financial Audit

ProfitWell

Consequently, this goal enhances the credibility of such financial reports with relevant parties, such as shareholders who need to know how well a company is performing when deciding whether or not to invest/divest. The following are some of the reasons why a SaaS financial audit is different: Recurring payments.

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SaaS Balance Sheet Examples

Baremetrics

Sign up for the Baremetrics free trial and start managing your subscription business right. Accounts Receivable: This is one of two items that only appear on the balance sheet under the accrual accounting system and not the cash accounting system. For a SaaS business, the deferred revenue category is particularly important.

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Rev Up Your Business with Revenue Intelligence: The Power of Deferred Revenue and Expansion Revenue

SmartKarrot

This is where revenue intelligence comes into play, helping companies to gain valuable insights into their revenue performance, identify growth opportunities, and drive profitability. In this blog, we will explore two key areas of revenue intelligence: deferred revenue and expansion revenue.

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What is GAAP Accounting?

Baremetrics

Revenue recognition, as per GAAP, states that payment is recognized as revenue after delivering the product or service in its entirety. Of course, that’s not how SaaS revenue works. (We We wrote more about revenue recognition here!) This often has an impact on SaaS businesses with deferred revenue streams.

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The 14 best SaaS tools: analytics, accounting, pricing, and retention

ProfitWell

Your subscription company should run like a well-oiled machine. Retain subscribed customers: Unlike other businesses, SaaS businesses rely on customers paying monthly or yearly for their subscription. Accounting software will keep all revenue assets organized. Taking advantage of SaaS tools will help you accomplish this.