SaaS bookkeeping
SaaS bookkeeping checklist
A SaaS business sells a subscription, so the revenue for the month is not always the cash that arrived. The monthly request should collect the billing system report, the deferred revenue schedule, the processor statements, the refunds, the hosting and software costs and the sales tax records. Reconcile the billing system to the bank before the revenue is recognized.
Who sends itSent by the SaaS bookkeeper after the month ends, usually by the 10th. It covers every plan, billing period and payment processor the client uses.
0 of 17 ticked
01Subscriptions and revenue
02Costs and vendors
03Payroll and people
04Tax and banking
What firms get wrong
- Recording the annual prepayment as revenue in the month it is collected.
- Matching the processor payout to the bank without recording the fees or the refunds.
- Ignoring sales tax until a state sends a nexus questionnaire.
- Missing the W-9 for a contractor who was paid through a platform.
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Questions about this checklist
What records does a SaaS business need each month?
The billing system report, deferred revenue schedule, processor statements, refunds, cloud and software invoices, payroll, contractor payments, sales tax reports and bank statements. The billing system is the source for revenue and the bank is the source for cash.
How is deferred revenue recorded?
Cash received for a service period that has not happened yet is a liability, not revenue. Recognize the revenue over the service period, and keep a schedule that shows the opening balance, the billings, the recognition and the closing balance.
Do SaaS businesses collect sales tax?
It depends on the state and on how the product is delivered. Some states tax software as a service, some tax only downloaded software and some do not tax either. Review the states where the client has customers and nexus.
Do contract developers get a 1099?
A payment to an unincorporated contractor for services is generally reported on Form 1099-NEC when it reaches the threshold. Collect a W-9 before the first payment and check the payee's entity type.
Sources
- IRS: Publication 334, Tax Guide for Small Business
- IRS: Publication 535, Business Expenses
- IRS: Instructions for Forms 1099-NEC and 1099-MISC
Checked November 3, 2026. Tax rules, forms and thresholds change; confirm them with the IRS or your tax software before relying on them.
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