One of the major groups involved in the standard-setting process is the American Institute of. It includes FASB Standards, Interpretations, Staff Positions, APB Opinions, and AICPA Research Bulletins. Keep you prepared for a financial audit at all times, so the process is minimally disruptive to your business. GAAP (Generally Accepted Accounting Principles) is composed of a fusion of over 2,000 documents that have developed over the last 60 years or so.Create stronger alignment with board members and investors who may not specialize solely in the SaaS space.Getting in the rhythm of GAAP reporting can help you: The common language of GAAP financials is valuable for private companies as well, even if they aren’t legally required to report them. The same way finance needs to find a common language with department leads to plan properly, accounting needs to adhere to GAAP standards so regulators, investors, and board members can understand financial performance relative to other organizations.
The other side of GAAP’s importance in SaaS lies in its ability to create a common financial language for all stakeholders in and outside of your organization.
That’s the simple answer to why any SaaS accounting team should care about GAAP, but it’s not the only one. If you’re a publicly-traded company, you are legally required to submit GAAP-compliant financial statements to the SEC on a quarterly basis. GAAP’s importance in SaaS, first and foremost, is a matter of compliance.