Accounting for Technology & SaaS Companies
Subscription revenue recognized correctly, deferred revenue that reconciles, SaaS metrics built on GAAP numbers - and books that pass technical diligence the first time.
Where tech companies get accounting wrong
Technology businesses concentrate an unusual amount of technical accounting into a small company: multi-element subscription contracts under ASC 606, deferred revenue balances that dwarf cash revenue, software development costs that may or may not be capitalizable, and equity compensation touching every hire. Each one is a place where diligence teams and auditors look first - because each one is where startups most often get it wrong.
We set these up correctly from the start, or untangle them before your next raise: recognition policies documented per contract type, deferred revenue waterfalls that reconcile to the GL, and metrics - ARR, NRR, gross margin - built on numbers that survive scrutiny.
What’s included
Revenue done right (ASC 606)
- Subscription and usage revenue: performance obligations, standalone selling prices and recognition patterns per contract type
- Multi-element arrangements: licenses, implementation, support and success services unbundled correctly
- Principal vs. agent: marketplace and reseller flows analyzed - gross or net changes your revenue line materially
- Deferred revenue: waterfalls that tie to contracts and reconcile to the balance sheet every month
The rest of the tech stack
- Capitalized development costs: ASC 350-40 internal-use software and ASC 985-20 assessments, documented
- Equity compensation: option and RSU accounting coordinated with your cap table and 409A valuations
- R&D considerations: Section 174 capitalization handled correctly in your tax provision and filings
- Metrics on GAAP rails: ARR, NRR, CAC payback and margin reporting derived from - and reconciled to - the audited numbers
Start with a free self-check
Free self-checks on the technical questions tech founders and controllers hit first:
- Revenue contract self-check (ASC 606) - do you have a contract - and what are the performance obligations?
- Principal vs. agent self-check - gross or net - which is your marketplace revenue?
- Variable consideration self-check - usage pricing, rebates and credits under ASC 606
- Revenue recognition readiness self-check - is your rev-rec ready for audit or diligence?
- Equity compensation readiness self-check - options, RSUs and the accounting behind them
- IP licensing revenue self-check (IFRS 15) - right-to-use vs. right-to-access licenses
Frequently Asked Questions
Our revenue is "simple SaaS." Do we really need ASC 606 analysis?
If every contract were one obligation billed monthly, barely. But the moment you add annual prepay, implementation fees, usage tiers or a reseller channel, recognition timing diverges from billing - and deferred revenue becomes the number your auditors and acquirers test hardest. A one-time policy memo now prevents a restatement conversation later.
Can you work with our existing stack?
Yes - QuickBooks Online, Xero, Sage Intacct and NetSuite, alongside billing systems like Stripe. We would rather configure your existing tools correctly than sell you new ones.
Do you support international structures?
Yes. We bridge IFRS and US GAAP - useful when a foreign parent reports under IFRS while the U.S. subsidiary keeps GAAP books, or vice versa. See our international page for the details.
Make revenue recognition a non-issue in your next diligence.
ASC 606 policies, deferred revenue that reconciles and metrics built on GAAP - senior-led, fixed-fee.
Book a discovery call