How to Create a Reliable SaaS Accounting Solution: Core Characteristics, Architectural Components, and Features

Businesses deploy SaaS accounting software to automate routine processes, reduce administrative overhead and human errors, and cut costs with a single, easy-to-access solution. However, off-the-shelf products often can’t provide businesses with feature sets and performance that fully meet their needs.

What you can do is build a custom software as a service (SaaS) accounting solution. This way, you can efficiently address your customers’ unique needs and find your niche in the SaaS accounting market.

In this article, we discuss how to build accounting software: what architectural elements to choose and what features to include. This article will be useful for development teams and enterprises planning to build custom web applications for accounting.

Why businesses deploy SaaS accounting solutions

Accounting is a complex area that covers different types of operations aiming to achieve different goals:

• Audit an organization’s financial results
• Make information-driven business decisions
• Prove tax compliance
• Reconstruct financial data for further analysis and investigation
• And more

To efficiently tackle all these tasks, business owners, bookkeepers, and accounting professionals rely on dedicated solutions and services that leverage innovative technologies.

According to the Practice of Now 2020: The essential report for accountants by Sage, 83% of accounting professionals believe that integrating new technologies is necessary for them to stay efficient and competitive. Most accounting companies and professionals invest in the deployment of predictive analytics, automation, artificial intelligence (AI).

Gartner states that worldwide end user spending on SaaS services alone is forecasted to reach over $145 billion in 2022, compared to $102 billion in 2020. Therefore, a SaaS accounting solution appears to have a better chance at success than a hybrid or on-premises product. Both large enterprises and individual professionals have reasons to choose SaaS-based accounting software over alternatives:

1. Scalability — The SaaS format enables businesses to pick only the services they need and easily adjust both the list of active services and the number of active users to their current needs without deploying a new solution.

2. Moderate pricing — A SaaS product can be more affordable than its on-premises analog. Any traditional solution requires heavy expenses on software licenses and critical updates, while SaaS services are usually distributed under a subscription or pay-per-use model.

3. Ability to integrate — In a modern organization, IT solutions work together to create a complex IT ecosystem. Therefore, being compatible and able to integrate with other corporate software is a must for an efficient SaaS accounting product. Start with ensuring that your SaaS product is well-matched with the most popular customer relationship management (CRM), enterprise resource planning (ERP), supply chain management (SCM), and human resources (HR) systems.

4. Enhanced data accessibility — One of the main advantages of SaaS technology is the possibility to access users’ data on any platform and device. This is a benefit of the SaaS model itself. To let your customers experience this benefit, ensure that data stored in your SaaS accounting application can be easily yet securely assessed from different desktop and mobile devices, operating systems, and browsers.

5. Strong data security — Corporate financial information is one of the most strictly protected categories of data. And while leading cloud service providers are known to take proper precautions to secure their clients’ sensitive data, there’s still a lot you can do to enhance the security of your SaaS product. Start with researching how to build a GDPR or PCI DSS compliant application and analyzing specific requirements for financial data security in your region. Allow your customers to assign granular access permissions, limit access to specific categories of data, run additional identity verification, and audit the activity of privileged users.

6. Automation — Accounting automation allows for speeding up operations, increasing the efficiency of accountants, and reducing the risk of human errors. With the accounting industry topping the list of automation technology adapters, accountants and bookkeepers will expect your SaaS solution to provide them with rich automation capabilities. Some common tasks to automate include tax and expense calculations, payroll management, and bank reconciliation.

Now that we’ve outlined reasons why businesses need quality SaaS solutions for handling their accounting tasks, let’s discuss what to pay attention to when you plan to build one.

What to consider before building a SaaS accounting solution

How to make accounting software?

Before you even start building a custom SaaS product for accounting, give some consideration to the following four things:

1. Customer demand

Make sure your solution meets the actual needs of your end users. Particularly, pay attention to the current requirements of your target industries, the size of your target organizations, the latest technology trends, and competitor offerings already available on the market.

Consider consulting a professional business analyst to evaluate the viability of your business idea and outline the core feature set to add to your SaaS product.

2. Quality assurance

To deliver a quality and secure product to your customers, it’s important to build your SaaS accounting solution with relevant industry and SaaS data security requirements in mind. Furthermore, consider implementing the shift left principle and plan for thorough testing of key features and functionalities from the very beginning of the project. This way, you’ll be able to continuously assess and improve your product’s performance and security.

3. Reliability of architecture

Stable and consistent performance is what helps high-quality products and services attract more customers. And while early testing plays a significant part in product quality assurance, building a reliable and future-proof architecture is just as important. Particularly, you need to design an architecture that accounts for the needed levels of scalability, including future improvements, ensure the high availability of your services, enable automated change management, and provide a means for fast disaster recovery.

4. Strength of the feature set

Last but not least, your SaaS accounting solution must have a diverse set of features to fully meet the needs of your customers. But as we discussed earlier, accounting entails working on different goals, with different data and operations. Therefore, the biggest challenge here is to properly synchronize feature diversity with objective customer needs.

In the following sections of this article, we’ll discuss the core elements of a reliable architecture and the key features to include in your SaaS accounting solution. Let’s start with planning for a strong, reliable accounting software structure.

Building a reliable architecture for SaaS accounting software

Reliability should be a high-priority characteristic for any SaaS solution. Offering a rich set of features for an affordable price won’t win you lots of customers in the long term if those features don’t come alongside full availability and high performance.

Here are the core elements you can use as the basis of your SaaS accounting solution’s architecture:

Let’s take a closer look at each of these elements.

Stateless web servers

When you develop accounting software, one of the first things to consider is that being web applications, SaaS products don’t maintain a defined local state. Therefore a shared database, with which the architecture can support no-touch elasticity, is critical. It’s difficult (if not impossible) to make an accounting system when web servers are configured with a local state.

Robotic process automation

Processing large amounts of data and transactions, today’s accounting solutions have a strong need for automation technologies like robotic process automation (RPA). Using RPA, you can enhance the automation of repetitive tasks and processes like tax calculations and payroll management.

Artificial intelligence (AI) and machine learning (ML)

AI and ML algorithms can be used for automating difficult tasks, including financial data analysis and audits. Artificial intelligence can also be helpful for enhancing a SaaS product with predictive analytics capabilities to forecast sales and expenses as well as to improve budget planning.

Multi-tenancy support

A SaaS solution with a multi-tenant architecture can be built on a common infrastructure yet offer individual services to a wide customer base. In a multi-tenant environment, the data of individual tenants is strictly separated. To ensure this separation, the system needs to identify each tenant by an ID that is employed at the application and database layers and linked to individual users. An identified user gets full access to their data while having zero access to data of other users.

There are three common scenarios for implementing multi-tenancy support in your SaaS accounting solution:

• 1. Build web-based applications and databases that are unique to each client. The infrastructure can, in theory, be shared among all tenants, but engineers can construct custom application environments for each client.
• 2. Provide clients with individual databases within a shared application. This entails the installation of a single version of the software, within which each client is configured with its own database. Things like physical data segmentation and per-customer encryption are all possible, yet application development and maintenance are much simpler compared to the previous case.
• 3. Incorporate a Salesforce-esque model in which tenants share not only the application version but the database as well. What you end up with is data that’s physically commingled yet logically separated.

API support

Implementing APIs helps with customizing your application. APIs allow advanced users and third-party developers to create additional components to enhance your solution and integrate their products with, thus building a comprehensive ecosystem.

User-driven configurations support

Enabling end users to customize the appearance, extend the data model, define specific workflows, and implement granular access permissions increases the competitiveness of your SaaS solution. This all falls under the umbrella of self-service. You can keep application costs and the number of issues low by making outsourcing and self-service a fundamental characteristic of the SaaS model.

Zero hard-coding

While building accounting software, make sure you don’t have web servers with hard-coded values for server-to-server communication and database connection strings. This is important for security, performance, and flexibility reasons. Engineers have to be sure that individual application layers can scale by themselves without breaking the connection between layers to successfully make a high-performing system.

In particular, ensure that different environments like testing, staging, and production can run simultaneously or that you can easily change any of these values if needed without compromising the performance of the entire system.

Data security

Keep an eye on relevant security standards, both regional and industry-specific. This way you’ll be able to choose the best way to identify users, manage access permissions, encrypt and secure data, and provide audit trails, among other things. For example, to improve data access protection and the user experience, you may consider enhancing your product with single sign-on and multi-factor authentication.

Blockchain

Enhancing your SaaS accounting solution with a blockchain may help you gain a competitive advantage and draw the attention of tech-savvy customers. For instance, you can use a blockchain to create tamper-proof and efficient databases with robust access management capabilities. Or, if enhanced with smart contracts, you can provide your end users with wider operation automation capabilities.

Customer support

Today, qualified 24/7 customer support is a must. The SaaS model allows users to access accounting software at any time and in any place. If an issue occurs, a client expects it to be solved as soon as possible. There are a few tricks to make your support team more effective.

You can implement an AI-powered chatbot to solve the easiest issues and a helpdesk to keep track of chats and reports. Support operators would appreciate a knowledge base with descriptions of resolutions for common problems. If you use a ticketing system, it’s a good call to create automated tickets based on customer reports.

At the same time, as Google Cloud points out in their reliability principles, aiming for 100% reliability isn’t a wise choice. What you need to focus on is creating a product that’s reliable enough to keep your customers happy without overspending on unnecessary features. In the next section, we discuss the top features to consider when you create accounting software.

Choosing the right features for your SaaS accounting product

When defining the core feature set for your SaaS accounting application, you need to take into account several factors:

• Needs of your target audience
• Demand for specific features
• Future changes to the product

Before designing the capabilities of your SaaS app, you first need to clearly understand who your target audience is. Define what businesses, organizations, and types of professionals you want to build accounting software for, what needs and demands they have, and what features and capabilities they would appreciate the most.

Next, analyze the capabilities offered by your key competitors to determine which features you can and which you must add to your product. Remember that implementing and maintaining unnecessary services is quite an expensive affair, while a lack of essential functionality will turn your customers away.

Finally, make sure to account for the future growth of your SaaS product. Think about additional technologies, services, and advanced capabilities you might want to implement later. And make sure that your current architecture and feature set won’t get in the way of these improvements. Otherwise, later on, implementing critical changes might become too expensive or even impossible.

Now, let’s take a look at the list of most useful features to consider when building a SaaS accounting application:

1. Accounting

Typical profit and loss reports, balance sheets, and aged debtor and creditor reports are the main accounting features. You can also consider implementing additional items that are often requested by end users, like dividend vouchers for clients, journey entries, custom reports, and comprehensive views of all accounts.

2. Banking

The ability for an organization to link all their corporate bank accounts to your system is paramount. Standard banking features you should make sure to include in your solution are capabilities to create bank account charts for further analysis and upload electronic statements in OFX, QIF, and CSV formats.

3. Estimates

This feature enables users to create, calculate, and manage estimates. Typical capabilities include creating templates for estimates, exporting or sending filled estimates by email, and turning estimates into invoices.

4. Invoices

Adding an invoice timeline enables clients to easily review open, overdue, and paid invoices. Giving clients the option to brand invoices with their own logos, set up recurring invoices, and customize automated late payment reminders are extra bonuses.

5. Expenses

Tracking expenses like payroll, bank payments, out-of-pocket expenses, and receipt reconciliation is fundamental for an accounting solution. Consider enhancing your SaaS accounting solution with expense recording and receipt photo uploading capabilities to make it easier for your end users to track and process their expenses. You can also try implementing expense tracking or payroll management features via an API.

6. Budgeting

Provide users with budget planning tools and templates for distributing financial resources across departments or business entities. Enable accountants to gather financial data from other accounting software and ERP systems, consolidate budget reports from different departments, and maintain a detailed budget history.

7. Forecasting

Forecasting is an essential part of a SaaS accounting solution’s planning capabilities. Automated analysis and comparison of budgets and actuals allow for efficient forecasting of future costs, income, and expenses. For better usability, forecasts need to be customizable and exportable.

8. Taxes

Providing the option of configuring sales tax per country is a valued feature. The ability to add multiple sales tax rates and compound taxes is helpful for a SaaS accounting system.

9. Reporting and analytics

The ability to automatically create a financial report and visualize analytics using various built-in templates is one of the key features of accounting software. It’s best to allow your customers to generate standard reports and create custom report templates. Also, consider equipping your accounting software with relevant tools for data analysis and visualization.

10. Multi-currency support

Accurate localization is necessary for any solution used in multiple countries, especially in terms of currency localization. Payments and transactions in different currencies should be processed with accurate conversion and tax rates.

11. Project dashboards

A to-do list is vital to track projects within an accounting solution. It should be coupled with an hourly rate, billed hours, unbilled hours, project status, and a notes section. Also, you can implement project dashboards that allow end users to synchronize statuses across accounting teams, track project profitability, and define and manage tasks.

12. Customization options

End users might have specific demands for your accounting application, from enabling custom accounting features to supporting various languages and user interface extensions. To increase your application’s competitiveness, you can also enable end users to switch off certain services of your SaaS application.

Conclusion

Custom accounting software development requires thorough planning of the SaaS software development lifecycle: architecture, feature set, future upgrades, etc. The ready solution needs to match the demands and expectations of its target audience and be competitive enough to stay in the market.

At Apriorit, we’ll gladly assist you at each step of this thrilling journey, from in-depth market analysis and architecture development to functionality extension and quality assurance.