Financial audits are a part of running any business, but the auditing process for Software as a Service (SaaS) is unique. Whether you’re auditing for internal purposes, your shareholders or at the request of the IRS, the SaaS industry’s nature complicates the auditing process. There are numerous variables to account for, and accuracy is crucial. Thorough audit preparation costs time and money. It also takes your accounting team away from other high-value tasks. A little help with audit preparation will go a long way.
At Compass East, we offer audit preparation support for SaaS companies. Our team will work diligently to position your company for a smooth audit. You’ll receive financial audit preparation support from experienced professionals who know your industry and the complex challenges you face. Get in touch to plan an audit prep strategy with Compass East.
Audit Preparation Services From Compass East
There are dozens of documents and forms to compile before an audit, especially for SaaS. Thorough preparation will expedite the process and ensure the information you disclose is accurate. Compass East has many years of experience providing audit prep support for SaaS companies. Work with us for complete confidence before your audit.
Bottom-Up Support During Audit Preparation
Our comprehensive support services cover everything from planning to management and responding to post-audit requests. We’ll conduct your preparation work and establish an accounting infrastructure that makes audit preparation easier going forward.
We offer various services to prepare you for any internal, external or IRS audit. Our team will:
- Coordinate with the auditor: Confirm all documents and tests that the auditor will require from you before and after the audit.
- Gather and evaluate essential documents: Compile, assess and analyze information from financial statements and schedules, trial balances, workpapers and other vital records.
- Complete required checklists: Follow through with all Generally Accepted Accounting Principles (GAAP) for SaaS businesses.
- Implement new accounting technology: Gather data faster during preparation and improve internal bookkeeping for the future.
- Establish accounting policies: Assess your current accounting policy to find actionable areas for improvement before guiding you toward a stronger policy.
Resolve Industry-Specific Audit Prep Challenges
As a SaaS company, you retain control of the products you develop because you offer them as subscription-based services. As a result, revenue and expenses can be hard to define, recognize and report.
While preparing for an audit, you’ll need to document all revenue according to the Financial Accounting Standards Board’s (FASB) GAPP, such as Accounting Standards Codification (ASC) 606 for revenue recognition.
Compass East has experience in audit preparation support for numerous types of businesses, including SaaS. We resolve SaaS-specific challenges such as:
- Evaluating variable consideration and termination provisions.
- Capitalizing contract acquisition costs.
- Recognizing revenue from license renewals at the appropriate times.
- Accounting for and capitalizing costs of software and labor that keep your software operational.
- Factoring modifications made during a client’s contract.
- Optimizing contract acquisition cost capitalization.
- Verifying that sales tax paid and owed align.
- Establishing the standalone value of your software licenses.
Benefits of SaaS Financial Audit Preparation Support
Receiving support during the audit preparation phase leads to many advantages. Work with Compass East to:
- Reduce audit preparation expenses: Complete your audit preparation without dedicating salaried staff to the task.
- Finalize the audit prep on time: We have the experience and knowledge needed to work through the process efficiently.
- Ensure your records are accurate: Our audit preparation support team leverages seasoned professionals and innovative technology to reduce errors.
- Comply with relevant regulations: We understand the laws and regulations that apply to SaaS companies, and we implement practices that adhere to them.
- Achieve more in other areas: Hiring outside support frees your staff to focus on other high-value tasks.
Why Compass East?
Compass East has the experience and resources to navigate the complexities of preparing for SaaS financial audits. We position SaaS companies for smooth audits by infusing the preparation support process with our unique approach and tools:
- Bottom-up accounting solutions: Practices, policies and tech that revamp your accounting process and expedite audit preparation.
- Forward-looking financial strategies: Accounting policies that complete today’s audit while laying the groundwork for greater accuracy and efficiency in the future.
- Actionable financial reports: Summaries that help you visualize expenses and revenue so that the audit drives positive change.
- Cloud-based financial technology stacks: Software that organizes critical accounting information as you prepare for the audit at hand and until your next audit.