Start with the billing system
Export the month's invoices, credits, refunds and new, changed and cancelled subscriptions from your billing tool. This is the source of everything else. If you close before this export is final, you will be rebuilding it after a late invoice lands.
Roll deferred revenue forward
Start with last month's closing balance. Add what you billed ahead of service this month. Subtract what you earned this month. The result should equal the balance on your books and the balance in your billing tool. A balance that does not tie is the most valuable thing a close can catch.
Reconcile payouts and fees
Processors pay you net of fees, refunds and disputes. Match each payout to a bank deposit, and record gross charges, fees and refunds as separate items. A processor clearing account that does not return to zero points to a payout you have not matched. See the guide to Stripe payouts.
Want us to handle it?
We close the year with you: accounts reconciled, 1099s sorted, and books your tax preparer can use.
Price: Free review of your books first, then a written quote before any work starts.
Accrue costs that arrive late
Hosting and infrastructure bills often arrive after the month ends but belong to it. Record an estimate based on usage, then replace it with the actual bill. Leaving them out flatters margin for a month and hurts the next.
Payroll, contractors and commissions
Reconcile payroll reports to the books. Check that contractor payments are in the right accounts and that you have a W-9 for each. Sales commissions can need special treatment when they relate to multi-month contracts, so ask your CPA how yours should be handled.
Sales tax and the pack
Software is taxed differently from state to state, so ask your CPA where you may have to collect before you sell broadly. When the numbers tie, save the reports, set the closing date and send a short pack to the founder: profit and loss, balance sheet, deferred revenue roll-forward and a one-paragraph explanation of anything unusual. The free monthly close checklist covers the general steps.
A sample calendar
One workable rhythm: on the first business day, export from the billing system and download bank and processor statements. By the third, finish the reconciliations. By the fourth, post deferred revenue, accruals and payroll. By the fifth, review the reports, fix questions and send the pack. These days are an example, not a rule, so pick dates your team can keep.
What slows a close is rarely the math. Late invoices, payouts nobody matched, and plan changes made in the billing tool but not recorded elsewhere cause most of the delay. Fix those at the source and the calendar shortens by itself. Keep a short list of recurring surprises for the next close, so each month starts a little ahead of the last.
Common questions
How long should a SaaS close take?
It depends on the number of customers and how clean your billing data is. Reconciling as you go shortens it more than anything else.
Do I need accrual accounting to close properly?
Most software companies need it for deferred revenue and accrued costs. Ask your CPA what your lender or investors expect.
Can the billing system do the close for me?
It can produce the reports. It cannot decide your accounting treatment or confirm that the totals match your ledger.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.
