Startup Q&A
CEO and Founder of Kruze Consulting
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Looking at the Chart of Accounts can be a bit dense so I’ve decided to present a sample P&L instead. The goal of the Chart of Accounts (COA) is to get the accounts to track to the appropriate location on the financial statements. Putting the right revenue and expenses into the correct categories makes it easier to produce the SaaS metrics you need to manage the business.
For example, if you have both implementation revenue (one time income) and recurring subscriptions, breaking down both revenue streams in your COA helps you report out important KPIs like ARR and MRR. Your subscription revenue is recurring, and there for is ARR, but your implementation revenue isn’t.
Take a look at the screenshot below and structure your Chart of Accounts accordingly:
Caveat: your business is unique, so you may need to do some tailoring! And if you are a SaaS business, we offer some of the best SaaS accounting services on the planet.
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