SaaS Financial Statements

saas-financial-statments illustration
Stefan Bucur SaaS Instructor

Written by Stefan Bucur

Stefan focuses on managing digital projects, building and leading cross functional teams using both agile and waterfall methodologies.

Passionate on helping organizations embark on the cloud journey, he guides teams and clients in building scalable SaaS solutions, supporting them in all stages of the process.

In 2021, Stefan joined JH Media Group, an agency that has focused on the design and build of SaaS systems since 2002. He currently serves as a project manager.


June 5, 2023

Introduction to SaaS Financial Statements

Financial modeling and financial statements are both important tools used in SaaS financial analysis, but they serve different purposes and have distinct characteristics.

SaaS financial modeling involves constructing a dynamic and interactive model that incorporates various financial variables, assumptions, and calculations.

Financial statements, on the other hand, are formal reports that provide a summary of a company’s financial activities and performance over a specific period. The main financial statements are the income statement, balance sheet, and cash flow statement. These statements are prepared based on historical data and follow specific accounting principles. Besides them being essential tools for assessing the financial health of the business and making informed decisions, they are often required for meeting regulatory requirements.

Another important aspect of financial statements is the role they play in building investor confidence. Investors rely on these statements to evaluate the company’s financial stability, growth prospects, and ability to generate returns. Accurate and transparent financial statements can attract potential investors and support fundraising efforts.

How to Create SaaS Financial Statements

  • SaaS Income Statement
    The income statement, also known as the profit and loss statement, summarizes the revenue, expenses, and net income or loss over a specific period. To create the income statement, compile revenue from SaaS subscriptions, one-time fees, and other sources. Deduct the cost of goods sold (if applicable) and operating expenses, such as marketing, research and development, and administrative costs. The result is the net income (if positive) or loss (if negative) for the period.
  • Balance Sheet
    The balance sheet provides a snapshot of the company’s financial position at a specific point in time. It lists the company’s assets, liabilities, and shareholders’ equity. Assets typically include cash, accounts receivable, prepaid expenses, and equipment. Liabilities include accounts payable, accrued expenses, and any outstanding debts. Shareholders’ equity represents the company’s ownership and is calculated by subtracting total liabilities from total assets.
  • Cash Flow Statement
    The cash flow statement tracks the company’s inflows and outflows of cash over a specific period. It includes operating cash flows (cash generated from the company’s core operations), investing cash flows (cash used for investments in assets or received from asset sales), and financing cash flows (cash from borrowing or issuing equity). The cash flow statement helps assess the company’s liquidity and cash management.
  • Accrual Basis Accounting
    SaaS companies typically use accrual basis accounting for their financial statements. This method records revenue when it is earned, regardless of when the payment is received, and records expenses when they are incurred, regardless of when the payment is made. Accrual accounting provides a more accurate picture of the company’s financial performance and aligns with industry standards.
  • Accounting Software
    Consider using accounting software specifically designed for SaaS companies to streamline the financial statement creation process. These tools automate financial transactions, generate reports, and ensure accuracy and consistency in your financial statements.
  • Professional Expertise
    Engaging the services of a qualified accountant or financial professional is advisable to ensure accurate and compliant financial statements. They can provide guidance on accounting standards, assist in the preparation of financial statements, and offer valuable insights for financial analysis and decision-making.


Creating accurate and reliable SaaS company financial statements is crucial to understand their financial performance, attracting investors, meeting regulatory requirements, and making informed business decisions.