Is there a good accounting firm for startups that specializes in SaaS?

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Kruze Consulting Startup Q&A Author
Vanessa Kruze
Founder, CPA

I run Kruze Consulting, which is a full service CFO firm that works exclusively with startups. About ~30% of our customer base are SaaS clients, and so we’ve built a specific program to accommodate the needs of these types of startups. A good temp CFO firm will:

  1. Know the lexicon. This is more of a tell-tale sign: if your CFO firm knows the lexicon, then you’ll know that worked with businesses like yours and can help guide you through pitfalls that they’ve seen before. Accounting and finance for SaaS companies is wildly different than that for a restaurant, and working with an expert in your industry will make all the difference. Not all accountants are created equal. Working with CPA or CFO who isn’t well versed in SaaS structures is like asking In N Out to cook you Kung Pao. Yes, in theory they have a kitchen and could run around the corner to get the ingredients, but it’s not going to be as good as Mission Chinese.

  2. Have a custom Chart of Accounts. that easily ties back to your financial model and KPIs for seamless budget-to-actual analysis (aka hitting your benchmarks). Revenue should clearly be defined as recurring v. one-off purchases, with a corresponding Unearned Revenue (Current Liability) account listed on the Balance Sheet. “COGS” should be tailored to list out direct costs associated with your service, often this is AWS Hosting. CAC, LTV, and Churn should be addressed in the financial model. We sat down one week and built out what the “perfect” SaaS Chart of Accounts should look like so that we could easily implement it with the our new SaaS startups. It evolves and becomes tailored over time, but there are always common threads.

  3. Have multiple levels of review. The ideal accounting & finance dept. has three levels: Staff Accountant, Controller, then CFO. Multiple levels of review ensure accuracy, because no one is perfect. I even have my own work cross checked.

  4. A good working relationship. Even within the specialized world of Startup CFOs, you have a lot of choices. It’s OK to shop around. Expertise, resumes, and technical capability may be similar, so find someone that you feel comfortable with.

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