Expanding into a New Market: What Every SaaS CFO Should Know

Your SaaS business is thriving, and you have decided to expand your business to another market. Congratulations!  

But for a CFO, expanding your business to another country with unfamiliar legislation, tax policies and reporting expectations can be daunting. The risk of inefficient practices, compliance issues and scattered data is real – and figuring it all out will take a lot of time. 

Based on our experience helping SaaS and other companies scale across over 40 countries, here are some of our team’s insights into what to consider – and how to avoid unnecessary headaches.  

1. Choose scalable accounting and ERP solutions early  

One of the first steps is to select the right accounting and ERP solution. You might be tempted to pick a local software that natively supports all the local compliance requirements. But as you expand into more and more countries, this will lead to issues with scalability, consolidation, reporting and billing complexity. 

Our suggestion? 

Start with a scalable, cloud-based ERP that grows with your business and supports multiple markets, currencies and languages. Ideally you would use the same solution in your subsidiaries that you’ve chosen for the HQ. This will enable you to work within a single system instead of coordinating, integrating and consolidating data from multiple ERPs or accounting solutions. 

If your choice is NetSuite, you’ll be able to apply a Localization SuiteApp to ensure you meet the local compliance requirements. Localization SuiteApps are designed to perform specific financial operations and payment processes according to local requirements. 

NetSuite also allows you to ensure that your data is accessible and compatible across the group. You should also consider replicating the parent company’s processes for better compatibility and more efficient reporting. 

2. Select the right accounting partner 

Your accounting partner will be crucial in managing local operations and ensuring continuity as you grow. Key questions to ask are: 

• Can they operate within your chosen software and processes? 

• Can they scale with your business? 

• How dependent is the service on individuals? 

We've seen cases where a partner has suddenly cut ties with a SaaS company due to overwhelming increase in billing volume. That is something no CFO wants to face. Small agencies also carry continuity risks if their staff gets ill or goes on leave. 

Our suggestion? 

One way to avoid risks is to work with a global accounting service partner that can grow with you, regardless of which countries you are expanding to next.. Expanding becomes much less of a headache when you continuously work with the same partner whose team handles all your accounting across all the needed countries.  

With Staria you are free to tailor the service model and allocation of responsibilities to your needs – and adjust them as your needs evolve.  

For example, perhaps you wish to handle group-level accounting yourself and only outsource the subsidiaries. Or you might want to handle some of the subsidiaries yourself and outsource the others. Maybe you’d like to only outsource AP and AR (see point 5), monthly closing, and regulatory reporting – or payroll. It’s your choice.  

3. Ensure access to key SaaS metrics 

For SaaS CFOs, metrics like recurring revenue, churn and forecasted cash flow are critical, but they are not readily available from all billing tools. This causes reliance on Excel files whose use is time-consuming and error-prone.  

Our suggestion? 
Choose a billing software that natively tracks your KPIs. The smart play is to anticipate future needs and pick a system that you can deploy across all your current and future markets. 

NetSuite’s billing module offers this functionality out of the box and can also integrate with other platforms to bring in credit card transaction data. 

4. Establish trustworthy and unified reporting 

One of the most common issues in multi-entity setups is unreliable or fragmented reporting. You might receive PDFs from subsidiaries or reports in the wrong currency, all of which become a nightmare when it’s time to consolidate financial statements for the group.  

This especially applies to businesses that have transformed from a legacy business model to a SaaS model.  

Our suggestion?

To avoid issues in reporting, you should: 

• Set clear reporting guidelines and standard operating procedures for subsidiaries 

• Implement unified systems where possible. With NetSuite, for example, you can access consistent data across all entities and trace issues back to the source 

If unified systems aren’t feasible, you could consider a centralized reporting and planning tool, like our own solution, which includes a built-in data warehouse and tools to unify data from different sources. 

5. Address billing, payments and revenue recognition early 

In SaaS business the big issue is billing – the sheer volume of it. SaaS billing complexity grows fast, especially with transaction- and volume-based pricing. If billing is handled manually, it quickly becomes unsustainable. 

Our suggestion? 
Invest early in ERP systems with built-in capabilities for: 

• Automated billing (with customizable controls) 

• Revenue recognition 

• Integration with payment platforms 

This prevents the need for multiple, disconnected tools and saves you time, money as well as frustration. 

6. Get expert support on tax and compliance 

Even the best-laid expansion plans come with surprises, especially regarding regulation and compliance. There are always uncertainties and potential blind spots that may cause you some sleepless nights. That’s why many CFOs benefit from a partner who’s navigated global expansion before. 

Our suggestion? 
Whether your next market is one of the 50+ we've already supported, or somewhere new and exciting, Staria is ready to help you chart the course.  

From consultation on the right technologies to compliance support, we’ll help you make smart, confident decisions that will make your market expansion smoother.