Scaling a SaaS business sounds great—more logos, more revenue, better valuation. But there are three metrics that will determine if you have the potential to scale and if you are scaling versus growing. These aren’t vanity metrics. You are swimming upstream if these metrics are not improving. Looking for a path to profitability? Start calculating […]
Mastering ASC 606: SaaS Revenue Recognition Essentials for Finance Leaders
If you work in SaaS finance, you can’t get away from ASC606 and revenue recognition. Understanding ASC 606 is essential for SaaS finance professionals—whether you’re a CFO, controller, FP&A analyst, or accountant. In a recent No Fluff webinar, I hosted revenue recognition expert Jill Hauck. We dove into practical applications of ASC 606 for SaaS […]
The SaaS Revenue Hierarchy: Why Defining Your Revenue Streams Matter
One of the most critical aspects of SaaS financial management is having clear and distinct revenue streams. A well-structured SaaS P&L provides fundamental data for analyzing margins, operational efficiency, and business health. However, many SaaS companies do a poor job of clearly defining their revenue streams. This has major impacts on how you manage your […]
Software M&A Trends for 2025: Insights from GLC Advisors
The high-flying times of 2021 are over, but it doesn’t mean you can’t be successful in software M&A. If you have a SaaS business performing well financially, you can still get funded and/or exit for nice ARR multiples. I recently sat down with Jim Williams, Managing Director at GLC Advisors, to discuss the current state […]
How to Create a Sales Compensation Plan for SaaS
Sales compensation plans play a critical role in the success and scaling of SaaS companies. The transition from founder-led sales to scalable, team-driven sales models can be challenging. The transition can stop companies from hitting the next level of ARR. Higher ARR, higher valuation. A well-designed sales compensation plan motivates teams, aligns with corporate objectives, […]
Why Legal Readiness Can Make or Break Your SaaS Exit
Achieving a $100 (or pick your number) million SaaS exit isn’t just about revenue milestones or growth rates. Of course, that’s very important. It’s also about the “boring” stuff. You must ensure your business is legally sound and prepared for the rigorous scrutiny of buyers. In a recent webinar, I hosted legal expert Omeed Tabiei. […]
Scaling with Confidence: The Ultimate SaaS Metrics Playbook
Operating your SaaS company without metrics is like flying a plane without instruments. Yeah, you are up in the air, but you might not know where you are headed. Or whether you have smooth air or turbulence ahead. As an in-house SaaS CFO and now fractional CFO, I’ve seen firsthand how critical it is to […]
How to Calculate the SaaS Magic Number
SaaS operators must understand the balance between sales and marketing spend and the acquisition of net new revenue. Enter the SaaS Magic Number. Here are my thoughts on how to use the Magic Number in 2025. Overinvest in sales and marketing relative to your new SaaS ARR bookings and will you not the see the […]
How to Properly Structure Your SaaS Accounting Foundation
The Software as a Service (SaaS) business model revolutionized the on-premise software industry. I started out in software in 2004. One-time software sales and annual maintenance at 18% of the perpetual license. We weren’t talking CAC Payback and Gross Revenue Retention. But we were talking gross margins and margins by revenue stream. SaaS introduced a […]
Understanding Contracted Annual Recurring Revenue: A Comprehensive Guide
Contracted Annual Recurring Revenue (CARR) was an obscure metric in the SaaS world years ago. Today, it’s become a hot and controversial SaaS metric when discussing company growth and SaaS valuations. CARR is a forward-looking SaaS revenue metric that estimates the maximum revenue size of a SaaS company. CARR combines two important aspects of revenue: […]