Software as a service (SaaS) businesses typically bill on a subscription basis, so SaaS accounting software needs to be able to accurately track and report on revenue recognition to remain compliant with standard accounting practices.
Karrin Sehmbi is an editor and content strategist on the small-business team. She has more than fifteen years of editorial experience in the fields of educational publishing, content marketing and medical news. She has also held roles as a teacher and a tutor.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
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Karrin Sehmbi is an editor and content strategist on the small-business team. She has more than fifteen years of editorial experience in the fields of educational publishing, content marketing and medical news. She has also held roles as a teacher and a tutor.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
NerdWallet's content is
fact-checked for accuracy, timeliness, and relevance by humans.
It undergoes a thorough review process involving writers and editors to ensure
the information is as clear and complete as possible. Learn more by checking
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Content was accurate at the time of publication.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
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business loan selections.
Objective and comprehensive business loans ratings rubric
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NerdWallet's small-business loans content, including ratings,
recommendations and reviews, is overseen by a team of writers and
editors who specialize in business lending. Their work has appeared in
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Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
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Every time.
We believe everyone should be able to make financial decisions with
confidence. And while our site doesn’t feature every company or
financial product available on the market, we’re proud that the guidance
we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products
appear on the site), but it in no way affects our recommendations or
advice, which are grounded in thousands of hours of research. Our
partners cannot pay us to guarantee favorable reviews of their products
or services. Here is a list of our partners .
Beyond standard accounting functions, software as a service (SaaS) companies require additional functionality from their accounting software that enables them to track contracts users have committed to for the service (called bookings), invoices sent to customers to collect payment for the service (billings), and recognized revenue. Additional features to help SaaS business owners manage customers and their subscriptions are also a benefit.
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Here are our top picks for SaaS accounting software.
Easy to share information with your accountant and to find QuickBooks experts and online resources if needed.
More than 750 app integrations.
Robust feature set includes record-keeping, reporting, invoicing and inventory management, plus a capable mobile app.
Chat and phone support available Monday through Saturday in all plans.
Cons
Expensive compared with the competition.
Frequent price increases and a tendency toward upselling.
Limited account users with each plan.
QuickBooks Online is an industry leader in the accounting field, thanks to its strong feature set, scalability and ability to accommodate small businesses with more complex financial needs. With millions of users worldwide, your accountant will likely be familiar with it.
Easy to share information with your accountant and to find QuickBooks experts and online resources if needed.
More than 750 app integrations.
Robust feature set includes record-keeping, reporting, invoicing and inventory management, plus a capable mobile app.
Chat and phone support available Monday through Saturday in all plans.
Cons
Expensive compared with the competition.
Frequent price increases and a tendency toward upselling.
Limited account users with each plan.
QuickBooks Online is an industry leader in the accounting field, thanks to its strong feature set, scalability and ability to accommodate small businesses with more complex financial needs. With millions of users worldwide, your accountant will likely be familiar with it.
Feature set includes an excellent mobile app and suite of reports, capable invoicing features, plus automated bill and receipt capture through Hubdoc.
Simple layout and easy to use.
Cons
No inbound phone customer support (callbacks are available, though).
Entry-level plan limits bills and invoices to five and 20 per month, respectively.
Must subscribe to the highest-tier Established plan to claim expenses.
Xero allows unlimited users at every subscription tier, a valuable feature for businesses where several users may need at least limited access to the system to run reports or analyze performance. Xero also has a customizable analytics dashboard that lets each user rearrange or hide panels.
Feature set includes an excellent mobile app and suite of reports, capable invoicing features, plus automated bill and receipt capture through Hubdoc.
Simple layout and easy to use.
Cons
No inbound phone customer support (callbacks are available, though).
Entry-level plan limits bills and invoices to five and 20 per month, respectively.
Must subscribe to the highest-tier Established plan to claim expenses.
Xero allows unlimited users at every subscription tier, a valuable feature for businesses where several users may need at least limited access to the system to run reports or analyze performance. Xero also has a customizable analytics dashboard that lets each user rearrange or hide panels.
Stay in touch with clients through the FreshBooks mobile app and get notified when invoices have been viewed or become overdue.
Intuitive, customizable invoicing capabilities compete with those of more robust accounting solutions.
Track time and add billable hours to invoices in all plans.
Weekday phone support in all plans.
Cons
Highest-tier Select plan only comes with two users (additional users add $11 per month) and lower-tier plans put limits on billable clients.
Least expensive plan lacks double-entry accounting reports, bank reconciliation and accountant access.
FreshBooks is a simple and affordable option for freelancers and very small businesses that don’t require many users and prioritize being able to operate on the go via mobile app. It’s an especially inexpensive choice for those who can work within lower-tier plans’ billable client limits, and all plans include time tracking.
Stay in touch with clients through the FreshBooks mobile app and get notified when invoices have been viewed or become overdue.
Intuitive, customizable invoicing capabilities compete with those of more robust accounting solutions.
Track time and add billable hours to invoices in all plans.
Weekday phone support in all plans.
Cons
Highest-tier Select plan only comes with two users (additional users add $11 per month) and lower-tier plans put limits on billable clients.
Least expensive plan lacks double-entry accounting reports, bank reconciliation and accountant access.
FreshBooks is a simple and affordable option for freelancers and very small businesses that don’t require many users and prioritize being able to operate on the go via mobile app. It’s an especially inexpensive choice for those who can work within lower-tier plans’ billable client limits, and all plans include time tracking.
Why we like it: QuickBooks Online is one of the strongest accounting platforms on the market. Setup is easy, the user experience is intuitive, most accountants are sure to be well-versed in using it, and the company offers different levels of support that accommodate your company’s evolving needs as it expands. QuickBooks Online is a good option for SaaS companies, in particular, because the software automates data entry and it grows with your business. Of particular interest to SaaS businesses, QuickBooks Online handles revenue recognition (offered with the Advanced plan only), and it integrates with more than 700 outside applications — including a handful of tools to help you automate and report on revenue recognition.
When it comes to tracking the financial health of your business, QuickBooks Online empowers you with fully customizable reports. There is also a helpful virtual community of QuickBooks users who are active on online forums and more than willing to help answer questions about reporting, integrations and general help with navigating the platform. Read our QuickBooks Online review.
Xero: Best for revenue recognition software integrations
Price:
$20 per month for the Early plan.
$47 per month for the Growing plan.
$80 per month for the Established plan.
Why we like it: Xero is another popular accounting software option for SaaS companies. The company offers three plan options, each suited for businesses of different sizes. All plans include the ability to invite collaborators to work on your Xero account (think team members and your accountant), create a variety of business financial statements, sync all business bank accounts and automatically reconcile transactions. Xero also offers a full-featured mobile app.
You can extend the functionality of your SaaS accounting via the Xero app store, which features an entire library of third-party software integrations. You can search by popular categories, featured apps and industries. Notably, Xero offers a number of revenue recognition software integrations — including a highly rated integration with Flowrev — as well as more than a dozen apps for SaaS businesses.
Since Xero offers a 30-day free trial, we recommend giving it a test run. Read our Xero Accounting review.
FreshBooks: Best for subscription and client management
Price:
$21 per month for the Lite plan.
$38 per month for the Plus plan.
$65 per month for the Premium plan.
Custom pricing for the Select plan.
Why we like it: FreshBooks is designed specifically for small businesses — from solopreneurs to small businesses with contractors or full-time employees. If your SaaS company is still in its early stages, this could be a good option for your SaaS accounting needs. FreshBooks offers four plans designed for businesses in different stages of growth. All plans, however, come with invoicing (including recurring invoices and late payment reminders), automated expense tracking, time tracking, payment processing and reporting (profit and loss statements, accounts aging).
Since the typical pricing model of a SaaS company is subscription-based, you may want to choose an accounting product that’s strong on subscription management. FreshBooks has well-built tools for both subscription and client management. The software includes a client management portal where you can create subscription-based profiles for your customers and manage those relationships along with automating recurring billing for subscriptions. Read our FreshBooks review.
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