The Subscription Income Statement
Zuora, in particular, has promoted the use of the ‘Subscription Income Statement’ as the preferred method for analyzing the performance of a subscription software company.
The metrics and analysis in ‘Subscription Finance’ are critical to determining the right amount of sales and marketing spend, how much to discount, and, ultimately, how much your company is worth.
That said, the subscription income statement is more of a subscription software-specific version of the managerial accounting contribution margin income statement. It’s useful for exactly the points above – to analyze past performance to help answer strategic and tactical business questions for the future.
- See more at: http://www.saas-capital.com/blog/accounting-methods-for-saas-companies/#sthash.nz1otILB.dpuf