Practice your financial storytelling in a way that weaves together GAAP and non-GAAP metrics to better describe the health of your organization. GAAP is the standardized principles and procedures all public companies must follow when producing financial statements.Ensure you have the latest financial information ready off the shelf in case a potential investor or current one asks for something ad hoc. Build a sense of confidence among potential investors by showing that your org has a stable foundation for operations.Keep you prepared for a financial audit at all times, so the process is minimally disruptive to your business.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.
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