My Skill Lab
AccountingIntermediate

Accounting for Startups and SaaS

Deferred revenue, ARR, burn and investor-ready books.

Taught by Manisha Bhattarai · ACCA, Finance Manager

What you'll learn

  • Design a chart of accounts and month-end process suited to a subscription business
  • Apply the five-step revenue model to monthly, annual and usage-based subscriptions and post deferred revenue
  • Build a deferred revenue waterfall that reconciles billings, revenue and the balance sheet
  • Classify SaaS cost of sales and decide when development costs are capitalised or expensed
  • Calculate MRR, ARR, churn, net revenue retention, CAC payback and LTV from ledger data
  • Forecast burn and runway and explain how SAFEs, priced rounds and option pools are accounted for

About this course

Startup and SaaS accounting has its own vocabulary: deferred revenue, ARR, net revenue retention, burn multiple, capitalised development costs and cap tables. This course is for founders, first finance hires, bookkeepers serving technology clients and accountants moving into venture-backed companies who need books that investors and auditors trust. You will set up a SaaS chart of accounts, apply IFRS 15 and ASC 606 revenue recognition to subscriptions, build a deferred revenue schedule, decide which development costs to capitalise under IAS 38 and ASC 350-40, derive MRR, ARR, churn, CAC and LTV directly from the ledger, forecast burn and runway, and understand how SAFEs, priced rounds and option pools appear in the accounts. Prerequisites: working knowledge of double entry and spreadsheets. Examples use Python and spreadsheet formulas you can reuse with exports from Xero, QuickBooks or NetSuite.

Course content

7 lessons
  1. 1Why Startup Accounting Is DifferentAccrual books from day one, a SaaS chart of accounts and the month-end routine investors expect.Preview
  2. 2Revenue Recognition for SubscriptionsApply IFRS 15 and ASC 606 to monthly, annual and usage contracts and post the deferred revenue journals.
  3. 3Deferred Revenue Schedules and Billing SystemsBuild the deferred revenue waterfall, reconcile billings to revenue and connect the billing system to the ledger.
  4. 4Costs: Cost of Revenue, Capitalised Development and Stock OptionsClassify SaaS cost of revenue, decide when to capitalise development spend and account for share-based pay.
  5. 5SaaS Metrics From the LedgerDerive MRR movements, churn, net revenue retention, CAC payback and LTV from accrual revenue and cost data.
  6. 6Burn, Runway and Cash ManagementMeasure gross and net burn, forecast runway with a thirteen-week cash model and judge capital efficiency.
  7. 7Cap Tables, Equity and Investor-Ready BooksRead a cap table, account for SAFEs, notes and priced rounds, and prepare the books for due diligence.