Over the past years, SaaS (software as a service) has seen significant and rapid growth. With its obvious advantages when it comes to innovation, security, usability, and cost. The SaaS industry is worth about $172 billion (Gartner). Since 2015, the SaaS market has grown from $31.5 billion to an estimated $171.9 billion. This means a fivefold increase in just seven years.
In particular, there is a strong demand for SaaS Accounting software in the market. Much less control over finances or poor accounting is one of the general reasons why companies—especially small businesses—run out of business. In a recent study, the U.S. bank found that poor cash flow management or poor understanding of cash flows takes charge for the failure of 82% of small businesses. There are a lot of companies that are using SaaS solutions in their business. It is a simple tool for evaluating the company’s finances and tracking capital spending.
Recent research shows that companies with more employees use more SaaS applications:
- Companies with fewer than 50 employees use only 16 SaaS applications on average
- Companies with 50 to 99 employees use an average of 24 SaaS applications
- Companies with 100 to 499 employees use an average of 47 SaaS applications
- Companies with 1,000 employees use more than 175 SaaS applications
In this article we:
- explain what SaaS applications are
- describe the step-by-step process of creating a SaaS application
- describe the main things to consider when creating your own custom software
- describe the main features of SaaS accounting software
- answer the question about the cost of SaaS cloud application development
- spell out how to choose a vendor for development SaaS Accounting software
What is SaaS accounting software?
First and foremost, “accounting” is a wider term. Let’s take a look at different problems accounting software may solve:
- Invoicing: it enables you to send invoices and track invoice history and invoice status.
- Expense tracking: it helps track your transactions like receipt reconciliations, bank payments, etc.
- Tax calculator: it supports VAT, income tax, monthly/quarter federal taxes, and national insurance taxes.
- Payroll management: it enables you to calculate employee incentives and bonuses.
- Bank account integration.
- Security: it guarantees role-based authentication and customer privileges.
SaaS – is a web application companies use instead of offline software. It is a subscription-based application that offers on-demand services to your customers. This model gains more popularity every year. This is a common occurrence when SaaS solutions are used for accounting, customer communications, CRM, analytics, and ERP.
Wondering how to develop an accounting software tool?
Get a fine introduction to the process of building SaaS accounting software tools that meet the market needs in this article. Discover our action-based guide to developing custom software and the potential costs you should prepare for.
How to Create Accounting Software [A Step-by-Step Guide]
The accounting software development process has its features because of the cloud nature of SaaS applications. Consequently, it is important to follow eight steps to make accounting software: Conduct market research, Determine a monetization strategy, Decide on a cloud Infrastructure, Create an MVP, Test and modify, Continue to develop the final product, Promote, Release, and Maintain.
Here’s how to create an accounting software (SaaS):
Step 1: Market Research and Goal Definition
Find a market fit. Before starting the development of an accounting SaaS application, you want to analyze competitors and conduct market research. You want to be sure your product will meet the business needs and provide an uninterrupted cash flow. After that, identify your product’s business goals and core functionality your accounting software should support.
If you face difficulties at this stage, contact the vendor for help. An experienced SaaS solution development company will offer you business analysis (BA) services and provide you with the best solutions to unlock and grow your desired market.
Step 2: Determine Your Monetization Strategy
At this step, you want to determine the structure of your software product. But, before starting the SaaS development process, you have to answer the question, “How do you make a profit with your SaaS solution?” This is the most important step before building a SaaS application. There are several options for earning income: subscription, ad revenue, or freemium.
Stage 3: Choose Your Cloud Infrastructure
The SaaS architecture is cloud-based, and this means that the databases, storage, and services are stored in the cloud rather than on physical servers. You want to choose a cloud service provider with superior scalability, reliability, and performance that can support third-party integrations. The most popular cloud infrastructure solution we use at Broscorp is Amazon Web Services (AWS). But we are flexible so Azure and Google Cloud are also a choice.
Stage 4: Build an MVP (Minimum Viable Product)
Do you want to know how promising your idea is? Do you want investors to be convinced that the chosen concept is viable and will generate decent returns? The advantages of building an MVP(Minimal Viable Product) are quite obvious: you will get the go-live product in less than 90 days, first customer feedback, and technical basis for further development. MVP includes only the most important features to meet the basic needs of your target audience.
Learn more about “Why Should You Build An MVP For Your Startup?“
Stage 5: Test and Implement Changes
After creating and launching an MVP, you can get feedback from early users of your SaaS application and think about which existing features to improve and which ones to develop from the ground up.
Stage 6: Start Developing the Final Product
Move on to actual custom software development and testing. At this stage, the web application development team starts writing code using programming languages, toolkits, and frameworks. It would help if you always kept in touch with your development team during the SaaS accounting software implementation. Your goal is to constantly check that you stay on the same page and follow the product specs correctly. Once you have finished developing the software, you want to test the web-application and make sure it meets all the requirements and specifications.
Stage 7: Promotion
Promotion is an all-important step that goes along with SaaS application development. The target audience you collect at the MVP-development stage can later become the first users of your application. By the time you roll out the first release, you should already have a community of fans waiting for the final release.
Step 8: Release and Support Stage
After the final release, SaaS developers will need to provide continuous maintenance and web application updates. Your users want to easily contact technical support if they face problems. Your Saas development company must take care of this, but you two want to work closely to ensure the quality and user-friendliness of the final product.
What are the main features of SaaS accounting software?
Here are some of the main features every SaaS accounting application should have:
1. Analysis and Reports
Accounting solutions must provide a quick overview of real-time financial data. For example, Key Accounts Receivable, Profit and Loss Summary, Accounts Payable, Revenue, Expenses, and Invoices.
2. Payment Processing
Every company that develops SaaS applications wants to add simple payment processing functionality to the system. One of the best examples of a SaaS-based application like that is QuickBooks.
3. User Security & Authorization
The system must be sufficiently capable of handling sensitive data, and this is possible if it offers a high level of security. User data or business-related data must be kept confidential.
4. Business Feature Compatibility
Organizations should be able to integrate into one system: their employees, payroll, HR, CRM, shipping, sales, and inventory.
When it comes to budgeting, cloud-based SaaS accounting systems outperform traditional spreadsheet/ on-premise accounting solutions significantly. These solutions can be used to collect financial data from other accounting software and ERP systems, integrate budget reports from several departments, and keep a complete budget history, which is then saved in the cloud for easy access by authorized stakeholders.
The data-driven forecasting tools in SaaS accounting software can be used to generate financial reports—future costs, revenue, and expenses—that are more reliable, giving business leaders more insight into the financial health of the organization. These reports can be customized and exported.
7. Project dashboards
Staying on top of every single project is essential for businesses. Project dashboards in SaaS software will enable users to monitor essential spending, manage the cost of each project (hourly rate, billed hours, and unbilled hours), and keep an eye on how their projects are doing.
How Much Does It Cost To Create A SaaS Accounting Software?
There is no uniform pricing for software development. Why? Because the cost of typical software development, including building a SAAS accounting software depends on many factors.
Some of the factors that will influence how much you spend are:
- The number and complexity of the required features
- The scale of the project and the potential for future maintenance
- Customization options
- 3rd party app integration
- Scalability requirements
- The types and the number of experts involved
- The project work model (in-house team vs outstaffing vs dedicated teams)
- The location of your development team. Developers in Ukraine and other Eastern European countries are typically less expensive than the ones in the US and UK
- The project’s duration
You may need to plan for additional costs such as marketing costs (if you are creating the program for commercial use), however, on average, the cost to build a software tool with regular complexity ranges from $50,000 to $400,000.
Why do businesses deploy SaaS accounting solutions?
There are several different reasons why businesses opt for SaaS accounting solutions including.
- Accessibility. SaaS accounting solutions are typically cloud-based. They are accessible from any location with a web browser. This makes it easy for remote teams to collaborate and access the data they need.
- Scalability. SaaS accounting solution is the perfect fit for growing businesses and large-scale organizations. It can easily scale to meet the changing needs of a growing business. You can add and remove features, extend functionalities, etc, without affecting data integrity.
- Cost-effectiveness. SaaS accounting solutions are typically less expensive than traditional accounting software. They do not require significant upfront investments in hardware or software.
- Better integration options. Unlike traditional applications, SaaS can easily be integrated with 3rd-party applications like payment gateways, etc, without worrying about compatibility issues.
What should be considered before developing a SaaS accounting solution?
Here are the top 5 things to keep in mind when looking to build a SaaS accounting system.
- Market demand. Take a good look at the current market situation in your target niche. Is there a market for another SaaS accounting solution? You don’t want to get into a market situation that is already saturated.
- Competition. It is also a good idea to study the competition. Know their strengths and weaknesses, and how can you exploit them to enter the market.
- Features. The feature set to include is another important consideration. You want a diverse set of features that is easy to use. They must also satisfy the requirements of the clients.
- Architecture. Your software architecture must be sound, reliable, and scalable.
- Development costs. Finally, you must consider the costs associated with the project. Can you afford to build and maintain the solution?
What are the benefits of building your own SaaS accounting solution?
There are several benefits to building your own SaaS accounting solution, including.
1. Revenue generation
The most obvious benefit is revenue generation. While you cannot expect to become a millionaire overnight just from selling a SaaS accounting solution, it offers something unique to the market that businesses are willing to pay for.
2. Offer customers scalability
The beauty of SaaS accounting solutions is that users can scale up or down according to their needs. This flexibility can help you attract customers that are not happy with traditional/ on-premise solutions, and grow your business.
3. Gain the competitive advantage
If you create a SaaS accounting solution that offers unique features or functionalities that are not available in existing solutions, you can gain a competitive advantage over other software providers.
4. Create a unique product to simplify accounting
Developing a SaaS accounting solution can help organizations simplify, automate, and streamline many of the tedious tasks associated with finances. This is especially useful for small businesses that lack the means to create their own solution.
How Can Broscorp Help You Develop Accounting Software?
First and foremost, you want to choose a team to develop the accounting SaaS software. At the first meeting, you will immediately understand who is in front of you—a professional or a beginner. A good development team will immediately show interest in conducting a detailed examination of your product to create good custom software.
Broscorp is a custom software development company that specializes in developing SaaS solutions for small and medium-sized businesses like yours.
We’ve got years of experience developing:
Financial Reporting Software
For analyzing the cash flow, calculating profit and losses, keeping the balance sheet up to date, etc. Learn about our successful case study to streamline financial analytics and reporting for a Swedish company.
For enabling businesses to make sales and manage receipts through a user-friendly interface. Also, it tracks stock, updates catalogs, and analyzes losses using an analytical system. Learn about how we created PoS systems, integrated with PIN entry devices, created custom sales analytics on top, and developed a stock tracking system.
Expense Report Software
To stay updated with powerful accounting reports including income statements, cash flow statements, and balance sheets. Also, users can add inventory to tracking reports and manage goods, costs, and incomes.
To create SaaS accounting software, you will need a development team with knowledge and experience in building cloud solutions. To strike the fine balance between price and quality, consider hiring a trusted external SaaS development company like Broscrop to help you create a SaaS product that fully meets your business goals.
Want to develop a SaaS application from scratch but don’t know where to start? You are in the right place. Feel free to contact Broscorp today to get the best possible software development experience.
We’re open to discussing your ideas and questions. Leave us your email and we will contact you to arrange an initial conversation.