What is saas and software?
Deferred revenue, MRR that ties to the P&L, and books investors can read.
A SaaS company's books run on a different clock than a services or product business. Cash lands the day a customer's card is charged, but revenue is earned across the subscription term — a $12,000 annual plan billed in January is $1,000 of revenue in January and $1,000 in each of the following eleven months, with the other $11,000 sitting on the balance sheet as deferred revenue until it's earned. Get that wrong and every downstream number is wrong with it: the P&L overstates a month with a lot of annual renewals and understates a quiet one, and a board or investor reading it draws the wrong conclusion about whether the business is actually growing.
The billing system is not the ledger, and the two drift apart faster than most founding teams expect. Stripe Billing or Chargebee knows what was charged, when a plan changed, when a discount was applied, and when a dunning retry finally succeeded — but that event stream has to be translated into journal entries and reconciled against the bank deposit, which nets out processor fees, refunds, and the settlement lag between a charge and the cash actually landing. A company that reports revenue straight off a billing-tool dashboard without reconciling it to the ledger is usually a few thousand dollars off by month three and doesn't know which direction.
Who does what
| Your CapEasy team | SaaS and software, the reconciliations and reporting behind it, and the questions list that keeps it honest. |
| Your CPA or enrolled agent | Everything that carries a licence in United States — rendered exactly as written: issue compilation, review or audit reports — those are restricted to licensed cpa firms. |
| You | One conversation with one named person, and the decisions that are genuinely yours. |
SaaS and software in United States
ASC 606 sets the five-step model; the deferred revenue schedule applies it mechanically
Under ASC 606, revenue is recognized as the performance obligation is satisfied, not when cash is collected or an invoice is issued — for a straight monthly or annual subscription that means ratably over the term, which is why an annual plan generates a deferred revenue liability that amortizes down each month. The five-step model itself — identifying the contract, the performance obligations, the transaction price, allocating it, and recognizing revenue as obligations are met — is a judgment the CPA applies, especially where a contract bundles a subscription with implementation, onboarding, or professional services. Once that treatment is set, the deferred revenue schedule applies it consistently month over month; it does not re-derive the treatment.
Section 174 requires R&D costs to be capitalized and amortized, not expensed as incurred
Since tax years beginning after December 31, 2021, Section 174 requires research and experimentation costs — which for a software company routinely includes a large share of engineering payroll — to be capitalized and amortized over five years for domestic research and fifteen for research conducted outside the US, rather than deducted in the year spent. This is a tax-return treatment the CPA applies, driven by cost data (which engineering hours and related expense qualify as R&E) that has to exist in a usable form before the CPA can apply it. Cost capture builds that data; it does not decide the amortization treatment.
A gross-vs-net presentation call under ASC 606 changes whether processor fees hit revenue or COGS
Whether a subscription business reports revenue gross of payment processing fees (with the fee shown as a cost of revenue) or net of them is a presentation determination under ASC 606's principal-versus-agent guidance, and it changes both the top-line revenue figure and the resulting margin. Billing-to-ledger reconciliation applies whichever treatment the CPA has set consistently — coding processor fees, refunds, and chargebacks to the account the CPA has designated — rather than choosing the treatment itself.
Multi-year or usage-based contracts create variable consideration questions the CPA resolves
A contract with usage-based components, ramped pricing, or performance-linked pricing introduces variable consideration under ASC 606, which requires an estimate of the transaction price that can itself change quarter to quarter as usage data comes in. Deferred revenue and MRR reporting for a usage-based or hybrid pricing model reflects the CPA's estimation methodology once it's set; a change in how that estimate is made, or a dispute over whether a usage tier should be recognized differently, is routed to the CPA rather than resolved inside the reporting.
What your CPA or enrolled agent receives from us
- A deferred revenue schedule tied to the reconciled ledger, showing the opening balance, additions from new and renewed subscriptions, amortization recognized in the period, and the closing balance the CPA reviews at close.
- MRR and ARR reporting broken into new, expansion, contraction, reactivation, and churned components, reconciled against the same billing and bank data underlying the P&L so the growth story and the revenue line agree.
- A billing-system-to-ledger reconciliation (Stripe Billing, Chargebee, or the platform in use) matching every charge, refund, and processor fee to its journal entry and to the bank deposit it settled into.
- Cohort or logo-level churn detail underneath the aggregate MRR movement, so a board or investor question about which segment is churning has an answer beyond the topline number.
- An R&D cost-capture workpaper allocating engineering payroll and related cost between qualifying development work and maintenance, support, or other non-qualifying activity, on a documented and consistent basis month to month.
- A revenue-by-customer-billing-address extract for whichever states or thresholds the CPA or sales-tax advisor is tracking, without a nexus or taxability conclusion attached.
