Whether they’re adding new products, signing up new customers or up-selling more to their current clients, software-as-a-service (SaaS) companies need robust technology tools to run their businesses. This is one of many business sectors where disconnected applications, manual systems and spreadsheets just don’t cut it; SaaS companies need modern platforms.
On track to reach $307 billion by 2026, the SaaS marketplace is exploding with opportunity as more companies and individuals use cloud versus on-premises software. Globally, about 34,000 SaaS companies are serving billions of users, with the US claiming the biggest stake in the market at about 60%. NetSuite, founded in 1998, is considered the first cloud computing software company. Salesforce later ushered in an era where businesses recognized the benefits of using cloud SaaS products, claims the largest portion of that market share at just less than 10% of the total SaaS market.
As a SaaS application that was born in the cloud, NetSuite offers SaaS companies:
- Increased efficiency
- Better visibility
- Freedom from disruptive, disparate software systems
- The elimination of ineffective, manual business processes
- Anywhere access
- Automatic software enhancement updates (twice yearly)
- Carried-over customizations
- Support as SaaS companies grow and scale
- Dashboards with real time KPIs – conversion, CAC, churn, CLV, ARR, ARPA, etc.
For growing SaaS companies, NetSuite provides an end-to-end business management platform that supports growth, scale and expansion. The ERP platform also helps SaaS companies establish financial controls, stay compliant and adhere to accounting standards like ASC 606 for recurring revenues—the very lifeblood of any SaaS company.
ERP for Growing SaaS Companies
As SaaS companies expand their services and add more customers, they must create complex business processes for subscription and customer management. These processes include—but aren’t limited to—forecasting, procurement, revenue recognition, recurring revenue streams and specialized pricing models.
Handling these processes on disparate systems and spreadsheets may suffice when a SaaS company is just starting out, but this approach can quickly become a liability as the company grows. You can’t easily share data across a growing organization using spreadsheets and ad-hoc standalone applications, for example, and manual data entry processes are notoriously error-prone and time consuming.
NetSuite offers these seven powerful benefits to SaaS companies that help them grow:
- A versatile, agile system. NetSuite’s versatility in adapting to changes—for example, when transitioning from a small privately held company to a publicly held global organization—provides an extremely efficient back-office systems foundation.
- Simplified revenue recognition management. With NetSuite, SaaS companies can automatically resolve any revenue recognition scheduling difficulties. The ERP also supports all current standards and helps companies comply with the evolving ASC 606 guidelines.
- Powerful financial management. NetSuite’s powerful accounting functionality and strong compliance management capabilities eliminate the burden of using spreadsheets and manual reconciliations, allowing SaaS companies to accelerate the financial close process.
- Easy integration with existing applications. NetSuite’s integration capabilities are a huge draw for SaaS businesses. While NetSuite ERP can handle the vast majority of a SaaS business’s financial and operational processes, there may be third-party tech that needs to be integrated to achieve maximum efficiency. For example, NetSuite can help automate the key parts of the accounting department through an integration with Bill.com or Avalara. NetSuite picks up the slack and allows SaaS companies to focus on what they do best: adding new products and signing up new customers.
- Global business management tools. Highly flexible, NetSuite can work alongside internal customer information databases, manage automated recurring billing, and handle global operations—even those that may deal with different currencies in different regions of the world. NetSuite OneWorld can also be used as an add-on, which allows business owners to manage operations across 217 countries, 27 languages, and 190 currencies without breaking a sweat.
- Real-time data for all corners of the organization. Using OneWorld, SaaS companies no longer need multiple solutions. Instead, they can integrate data from NetSuite OneWorld in a specialized module that provides real-time data at all levels to ensure executives have access to information at any time. NetSuite OneWorld can also adjust for different currencies, languages, taxation and legal compliance at local levels, and handle regional and global business consolidation.
- Automated billing and invoice management. NetSuite’s billing and invoicing solution automates invoice-related tasks and helps SaaS companies manage the entire subscription lifecycle—including subscription modification, prorated billing, consolidating multiple charges on a single invoice and auto-generating renewals to improve customer service and retention.
With years of experience helping SaaS companies implement and optimize NetSuite, ScaleNorth is ready to help you make the transition easy. We help SaaS companies with implementations, integrations, outsourced accounting, and more. We also assist with complex financial transactions for private equity-backed companies with complex structures such as subsidiaries or international expansion. Contact us today to discuss NetSuite solutions for growing SaaS companies.