Super proud of our team for completing their QBO ProAdvisor and Advanced ProAdvisor Certifications this week. Here are some takeaways from our training that can help our finance leaders in the technology space.
Deferred Revenue: Deferred Revenue is finally available in QuickBooks Online Advanced. Many SAAS companies, particularly those with Enterprise or upfront payment terms struggle to use spreadsheets to keep track of deferred revenue and this is a major area where we see multi-year adjustments being needed.
The new deferred revenue module allows for service-type items to be adjusted for contract periods. Importantly this is not available for Product type items in QuickBooks so this needs to be carefully configured to take advantage of the new tool.
We find that tech companies may have already signed contracts or begun service without invoicing. The new tool requires the service date to be the current date or later which may create problems if you are late with billing clients.
Importantly, if you are using Stripe or another merchant service platform the revenue recognition would only work if you configure the import of invoices into QuickBooks the right way with Service dates being clearly defined. This is ideal for companies that are only using QuickBooks Online to issue all invoices – so lends itself to Enterprise SAAS companies in particular.
The reporting functionality at first glance looks very clean. The tool doesn’t have a way to do this for Commissions at the moment, as this is another area that finance leaders have to grapple with when dealing with ASC 606 compliance.
A frequent question I get from finance leaders is – What is the right time to move from QuickBooks to an ERP system?
It depends is usually my answer, but I think it does come down to the cost of implementation and the size of the finance team internally. If you are scaling your finance team, often QuickBooks Online Plus with its 5 users and 2 accounting firms can’t get outgrown quickly.
With QuickBooks Online Advanced you get 25 users and 3 accountant firms, so this can help a scaling finance team at tech companies without the huge cost of upgrading to an ERP system.
If your company is looking to get started with QuickBooks Online our expert team can help your technology company quickly set up your accounting system, convert from QuickBooks Desktop or another accounting software, and get your financials ready on an ongoing monthly basis.
Contact us today to learn more about how setting up an accounting system for your technology company can save you time and money.