SaaS Accounting (Revised): Bookings, Billings, Revenue, Deferred Revenue, and More

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Mergers & Inquisitions / Breaking Into Wall Street

Күн бұрын

Пікірлер: 28

@financialmodeling Жыл бұрын

Files & Resources: breakingintowallstreet.com/kb/venture-capital/saas-accounting/ Table of Contents: 0:00 Introduction 1:26 Part 1: Bookings vs. Billings vs. Revenue 2:22 Part 2: Simple Excel Schedule 5:11 Part 3: Accounts Receivable and Deferred Revenue 9:05 Part 4: 3-Statement Model Example 11:30 Recap and Summary

@DJ-yc5qk Жыл бұрын

I’ve been in software as a service on the go to market side and have been trying to learn more about accounting and finance to take on a general manager role, thank you for this content.

@financialmodeling Жыл бұрын

Thanks for watching!

@Anita-ls1sb 10 ай бұрын

Trying to get into SaaS, thank you for this video!!

@financialmodeling 9 ай бұрын

Thanks for watching!

@dajacobson Жыл бұрын

Looks good!

@financialmodeling Жыл бұрын

Thanks for watching!

@gthxyz780 Жыл бұрын

Thanks a ton. It's really helpful also please can you please educate on the expense side for SaaS companies..and top 5 SaaS Kpis.

@financialmodeling Жыл бұрын

Thanks. Please see the tutorial on SaaS metrics for more examples: kzbin.info/www/bejne/jYHOY5x7rc6cr8k

@yohanmalet2372 4 ай бұрын

Hi Brian, thanks for the great video, super useful! Quick question on the revenue recognition (around 5:00): is it triggered by the booking or the billing? I.e., in your example, booking and initial billing take place in the same month however in practice, it is not unusual for company to have a book-to-bill gap. If we assume that this gap is one month, so bookings $120 takes place in month 0 and billings $60 take place in months 1 and 7. Would revenue $120 still be recognised between months 0 and 11 (i.e., jan to dec) or between months 1 and 12 (i.e., feb to jan)? thanks in advance for your response :)

@financialmodeling 3 ай бұрын

Revenue recognition corresponds to invoices under GAAP rules (so billings, not bookings). If there is no billing until Month 1, revenue recognition starts in Month 1.

@yohanmalet2372 3 ай бұрын

@@financialmodeling Clear - thanks a lot!

@karenhouston7741 2 ай бұрын

hi. great video. do you have a similar excel tutorial when there are free periods in the initial term and the recognition of contract assets in Month 0?

@financialmodeling 2 ай бұрын

Not at this time, no.

@andresventura4825 2 ай бұрын

what is the best way to model for existing customers as i forecast new bookings? we typically receive cash upon booking so for new customers, new bookings = cash receipts but for existing customers, what do you suggest?

@financialmodeling Ай бұрын

It depends on the company, contract length, and other factors. But if new bookings = cash received, it should be fairly easy because Cash and DR both increase to reflect that at first, and then the revenue gets recognized over time, with minimal changes in AR due to the quick collection. For existing customers, you normally just continue to recognize revenue ratably over the period. For renewed contracts, you have to look at the cash collection time and contract period and follow those. If it's also very quick cash collection, just make Cash and DR increase and recognize revenue over time. If the collection time is longer, you will need to increase AR at first and then reduce it when the cash is collected.

@MichaelHolder24 Жыл бұрын

Hey, this is great - thanks. Any chance you can do something on (1) Book to BIll ratio and (2) Backlog, two metrics that would tie into these concepts but more in context of semiconductor manufacturing.

@financialmodeling Жыл бұрын

As you said, those are more hardware/semiconductor metrics and less related to SaaS. We might feature something on hardware in the future.

@qwobify Жыл бұрын

SaaS investor here. Good video but I think you miss one of the key features of Enterprise SaaS that investors like which is upfront cash collection for the ACV or TCV.

@financialmodeling Жыл бұрын

Thanks, but we do mention this and discuss some of the key numbers in the SaaS Metrics video from last year. I'm now trying to limit videos in this channel to a max of ~10-15 minutes, so they need to be a bit more focused on specific topics without getting into overview discussions of everything.

@AishaAlbinali 5 ай бұрын

Can it used in a nonprofit semi government medical organization?

@financialmodeling 5 ай бұрын

I'm not sure I understand your question. Non-profit accounting has some differences, but the principles here for SaaS and subscription models still apply.

@ryanpierce7694 29 күн бұрын

What about implementation fees

@financialmodeling 25 күн бұрын

They would be recognized as services revenue and recognized as delivered. They are not subject to long-term contracts in most cases, so the accounting is more standard.