Automating Revenue Recognition for SaaS: Reasons to Migrate from Spreadsheets

1. Revenue Recognition is Too Complex to Handle Manually

SaaS companies deal with:

• Deferred revenue across the contract term
• Usage-based billing and variable fees
• Contract modifications such as upgrades and downgrades
• Performance obligation tracking
• Determining standalone selling prices (fair market value)

Trying to manage revenue recognition in spreadsheets isn’t just slow—it’s risky. Audit findings, incorrect reports, and compliance gaps are common. More importantly, it prevents finance teams from providing timely insights to the business.

2. Month-End Closes Take Too Long

A fast-growing SaaS business can’t afford to wait 10–15 days for a month-end close. But many do because:

• They manually track revenue schedules
• They enter journal entries by hand into NetSuite or QuickBooks
• They reconcile billing, payments, and revenue using CSVs

This lag creates challenges with the board and investors. When stakeholders ask for topline revenues or to see the income statement, it takes days to respond. Automation compresses the close timeline, giving execs and investors real-time visibility.

Revenue Recognition

Tools like Ordway automate:

• Deferred revenue schedules
• Standalone selling price (SSP) allocation
• Tracking and satisfying performance obligations
• Revenue re-allocations after contract modifications

This is essential to stay compliant with ASC 606 and IFRS 15, especially with complex pricing models.

Journal Entry Creation

Every invoice, credit, and revenue event should trigger automated journal entries:

• For revenue, invoices, payments, credits and refunds
• Mapped to the right accounts based on product, customer, or region
• Accompanied by full audit logs and traceability
• Easily posted to your GL in your ERP or accounting system

This eliminates the risk of error-prone uploads and stale data.

Close & Reconciliation Workflows

With automation:

• Deferred revenue schedules are automatically created with new contracts
• Revenue schedules are adjusted with contract modifications
• Revenue is recognized each period as performance obligations are satisfied
• Subledger and general ledger are synchronized without manual adjustments

Finance teams can lock the books faster and with more confidence.  Audit prep becomes proactive, not reactive.

Faster, More Confident Reporting

When the close takes 1-3 days instead of 10-15, information flows faster to the executive team and board:

• Executives get top-line revenue for the income statement 
• Investors have greater confidence in the numbers

Finance and accounting can spend time on exceptions rather than basic calculations

Audit Readiness Without the Panic

As SaaS businesses grow the importance of external audits increases—whether it’s for equity funding, debt covenants, regulatory compliance or an exit through M&A. Automation means:

• You can produce audit trails on-demand
• Revenue schedules are system-generated, not spreadsheet-built
• Internal controls are enforced automatically

More Strategic Headcount Allocation

Don’t hire another accountant to close faster. Automate. Then use that capacity for:

• Strategic planning
• Scenario modeling
• Investor updates and analysis

This is how lean teams outperform larger ones.

• CRM → Billing → ERP is synced, not stitched together manually
• New customer contracts are automatically converted into revenue schedules
• Contract modifications trigger adjustments to deferred revenue tables
• Corporate revenue recognition policies are enforced automatically by the system
• Revenue recognition and invoicing are unified in the same platform

They’ve moved from reactive number crunching to proactive business leadership. Examples:

• Companies like Mosaic and Paubox cut month-end close times by 80%【78†source】
• Dispatch and Casepoint reduced revenue leakage and audit risk with automation
• Gentreo and ListReports scaled to thousands of contracts without expanding headcount

• Revenue-first design: Native support for revenue accounting. Not a billing application that bolted on rev rec from an acquisition.
• Native ERP integrations: Easily sync with Xero, NetSuite, QuickBooks, Sage Intacct, SAP, Oracle
• Contract modification support: Supports upgrades, downgrades, renewals, usage overages
• Real-time automation: Instant journal entries, no batch jobs
• Audit trail visibility: Every journal entry change is traceable

Ordway’s revenue recognition engine checks every one of these boxes.