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Posted On: 12/12/2018 11:12:17 AM
Post# of 32698
Exactly and that's the reason why those rules are there. Otherwise you wouldn't be able to compare one company to another if how they are doing their accounting is different.
If someone signs up for 1 seat Dec. 1 for 1 month you can recognize that revenue Dec. 1 If they give you all 12 months in advance to get a discount, you can't recognize it all. Keep in mind the SaaS accounting rules are not as simple as that either.
A few more thoughts for the board:
1. What are two reasons why CRM companies' PE ratios are so high?
2. How much revenue does 510,000 users generate?
3. How much revenue does Sound Concepts have now that is unrecognized?
4. Why are most CRM companies not profitable but valued so high?
If someone signs up for 1 seat Dec. 1 for 1 month you can recognize that revenue Dec. 1 If they give you all 12 months in advance to get a discount, you can't recognize it all. Keep in mind the SaaS accounting rules are not as simple as that either.
A few more thoughts for the board:
1. What are two reasons why CRM companies' PE ratios are so high?
2. How much revenue does 510,000 users generate?
3. How much revenue does Sound Concepts have now that is unrecognized?
4. Why are most CRM companies not profitable but valued so high?
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