Industry guide
SaaS bookkeeping
SaaS bookkeeping separates billings, collections, recognized subscription revenue, processor activity, deferred amounts, payroll, and cash runway.
Reviewed by the Booksmrt bookkeeping teamLast reviewed 2026-07-27
What the monthly close has to prove
- Reconcile subscription billings and processor settlements.
- Separate collected cash from recognized revenue where accrual reporting applies.
- Track annual prepayments, refunds, credits, and chargebacks.
- Review payroll, contractor, hosting, and software costs against runway.
Documents to collect
- Billing-platform exports
- Processor settlement reports
- Bank and card statements
- Payroll registers
- Customer credit and refund reports
- Contracts supporting material annual prepayments
Common failure points
- Annual cash collections treated as one month's revenue
- Processor deposits recorded net
- Founder funding recorded as sales
- Hosting and direct service costs classified inconsistently
- Refund liabilities omitted
Example
A customer may pay $12,000 for a year in advance. Cash arrives immediately, while accrual revenue may be recognized over the service period.
Sources
Keep learning
Accrual basis accountingAccrual basis accounting generally records income when earned and expenses when incurred.RevenueRevenue is income earned from a business's ordinary activities before subtracting expenses.Cash receivedCash received is money deposited or otherwise collected, regardless of whether it is current-period revenue.Cash flow statementA cash flow statement explains changes in cash from operating, investing, and financing activities.Gross profitGross profit is revenue minus the direct cost of producing the goods or services sold.
Educational information only. Booksmrt provides bookkeeping services, not tax, legal, audit, or investment advice. Confirm material accounting and tax decisions with the appropriate professional.