QuickBooks Online for SaaS Companies: 3 Essential Tips

For SaaS companies using QuickBooks Online (QBO), setting up your accounting system correctly is important for accurate financial reporting and decision-making. In this article, we'll provide three essential QBO tips specifically tailored for SaaS businesses. These tips will help you better track revenue, manage expenses, and maintain GAAP compliance.

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Tip 1: Structuring Your Chart of Accounts for SaaS Operations

For SaaS companies offering multiple products, proper account structure is vital for understanding revenue sources and departmental spending. Here's how to set it up effectively:

Product Revenue Tracking

• Create separate income accounts for each product in your Chart of Accounts
• This separation allows you to easily track revenue per product
• Example: "Product A" and "Product B" as distinct income accounts

Department Tracking with Classes

‍Note: Requires QBO Plus subscription

1. Enable Class Tracking:

• Navigate to Account Settings
• Open Advanced Settings
• Turn on "Track Classes"

2. Set Up Department Classes:

• Go to Settings Icon → All Lists → Classes
• Create classes for each department (e.g., Customer Support, Engineering, Finance, Marketing)
• Assign employees to appropriate departments for payroll

Pro GAAP Tip: Ensure customer service payroll expenses are properly categorized under cost of sales.

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Tip 2: Managing Stripe Transactions in QBO

For SaaS companies using Stripe, here's how to effectively record and track payment processor activity:

Setting Up Stripe Recording

1. Download Stripe Data:

• Access the Balances tab in Stripe
• Locate the Balance Report
• Download the "Balance Change from Activity" section (make sure it's itemized, and all columns is selected)

2. Create a Stripe Account in QBO:

• Open Chart of Accounts
• Create a new bank-type account (e.g., "Stripe Cash")
• Use this account to track Stripe transactions

Recording Transactions

• Summarize Stripe's balance report information in journal entries
• Break out deposits into their component parts (earnings, fees, refunds)
• Track payment processing fees properly

Pro Tip: Ensure payment processing fees are categorized as cost of sales.

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Tip 3: Setting Up Recurring Revenue Tracking

For SaaS companies offering both monthly and annual subscriptions, proper revenue recognition is crucial:

Create Subscription-Specific Accounts

1. Set up separate income accounts for different subscription types:

• Monthly subscription revenue
• Annual subscription revenue
• Make them sub-accounts under your main product revenue accounts

Managing Deferred Revenue

1. For annual subscriptions:

• Move income from P&L to balance sheet using journal entries
• Credit deferred revenue account
• Use QBO's recurring transaction feature for monthly revenue recognition

2. Set Up Recurring Transactions:

• Create monthly journal entries to recognize revenue
• Set appropriate start dates and number of occurrences
• Monitor deferred revenue balance regularly

Time-Saving Tip: Consider using automation tools like Accruer to shrink accrual accounting from hours to seconds by automating deferred revenue, prepaid expenses, and fixed assets in real-time. Accruer calculates and books every entry based on a simple phrase "for the period," and automatically creates your backup schedule for reconciliations and audits.

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Streamline Your SaaS Accounting

As both an accounting firm and a SaaS company ourselves at FinOptimal, we use these tips daily for our own operations and our clients' businesses. By implementing these QuickBooks Online tips, you will be able to better:

• Track product performance more accurately
• Monitor departmental spending effectively
• Manage payment processor transactions efficiently
• Handle recurring revenue recognition properly

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