SECTORS
SaaS

How can SaaS companies optimize their cash management?

SaaS, or Software as a Service, has specific characteristics that give rise to particular financial challenges. In this article, we will look at how cash management software such as Fygr can help you.
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SaaS: the essentials of cash flow management

Cash management is a vital strategic issue for SaaS companies, whose model is based on recurring revenues but heavy and continuous investments. Tensions arise from a structural imbalance between acquisition, retention, and investment cycles:
Cash-intensive subscription model with acquisition costs before revenue
Ongoing risk related to churn impacting MRR and customer value
Intensive investment cycles in innovation, marketing, and expansion
Complex financial visibility on runway and financing needs
Fygr enables SaaS companies to secure their financial trajectory by linking recurring revenue, growth assumptions, and cash flow projections.

The specific cash flow challenges for SaaS

Why is cash flow management particularly difficult for SaaS companies? We have identified three major issues.
The subscription model
Churn rate volatility
Intensive investment cycles and competition

The subscription model

The SaaS model relies on recurring monthly revenues, which, although seemingly predictable, conceal significant financial complexity.

Unlike traditional one-time sales models, SaaS companies must constantly invest heavily in customer acquisition and technology development before they can recoup these costs.

The ratio of initial investment to future revenues creates constant pressure on cash flow, with each new subscription representing a long-term gamble.

Churn rate volatility

The churn rate is a major financial risk for SaaS companies, as it constantly threatens the stability of recurring revenue.

Each customer lost represents not only an immediate decrease in revenue, but also the loss of the initial investment made to acquire them.

This constant uncertainty makes financial projections and cash flow forecasting considerably more difficult, forcing companies to maintain substantial financial reserves to absorb these fluctuations.

Intensive investment cycles and competition

The SaaS sector is characterized by extremely dynamic competition, where technological innovation and rapid growth are essential for survival.

Companies must constantly reinvest a significant portion of their revenues in R&D, marketing, and business expansion, creating a virtually continuous investment cycle.

This need for constant growth generates significant and volatile financing requirements.
BEST PRACTICES

Best practices for SaaS cash flow management

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Controlling retention rates and their financial impact

The SaaS sector relies heavily on recurring revenue, which makes churn rate a critical financial indicator. A SaaS company must develop a proactive customer retention strategy, carefully analyzing the reasons for departure and building loyalty mechanisms. This approach involves precisely segmenting customers according to their profile, usage behavior, and economic value. By understanding the early warning signs of churn, the company can implement targeted preventive actions, such as training programs, personalized support, or re-engagement offers before the customer considers leaving.

Accurately managing the LTV/CAC ratio

The performance of a SaaS company is mainly measured by the ratio between customer lifetime value (LTV) and customer acquisition cost (CAC). Rigorous management requires meticulous monitoring of these two indicators and continuous optimization. This requires a highly documented marketing and sales strategy, where every dollar invested in acquisition is analyzed in terms of return on investment. The goal is to gradually reduce the cost of acquisition while increasing the average value of customers, particularly through relevant upselling and cross-selling strategies that enrich the customer experience and generate additional revenue.

Building an agile financing strategy

SaaS companies operate in a highly dynamic environment that requires a flexible approach to financing. It is crucial to develop a forward-looking view of working capital requirements, anticipating the different phases of growth and the associated investment needs. This involves maintaining several financial scenarios at all times, accurately identifying potential periods of cash flow pressure, and preparing alternative financing options. The ability to raise funds quickly, negotiate appropriate lines of credit, or attract investors is becoming a strategic lever for growth.
CHOOSE FYGR

Why use Fygr for SaaS?

The solution for optimizing your cash flow management: use specialized software such as Fygr. Fygr already supports many SaaS companies in their daily cash flow management. Let's take a closer look at how cash flow management software such as Fygr can help SaaS companies manage their cash flow more effectively.
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GOOD REASON #1

Automatic bank synchronization

Track your recurring subscription revenue and optimize your financial visibility in real time
Accurate tracking of MRR (Monthly Recurring Revenue) with automatic categorization by subscription level
Instant multi-product and multi-country financial consolidation
Automatic analysis of financial health by customer segment
GOOD REASON #2

Cash flow forecasts

Simulate your financial trajectory and accurately anticipate your financing needs
Cash flow forecasts
Modeling the impact of churn rate on future revenues
Financial runway projection based on different growth scenarios
GOOD REASON #3

Comparative analysis forecast/actual

Align your financial strategy in real time with accurate tracking
Dynamic measurement of the gap between projected MRR and actual MRR
Early detection of variations in commercial performance
Real-time adjustment of budgetary and strategic assumptions

They chose Fygr

Here's what some of our customers have to say after choosing Fygr to visualize their financial data:
I've been using Fygr every day since we installed it: I feel much more relaxed about my cash flow, without having to put in all the effort I used to with Excel.
Thomas Reynaud
Founder & CEO & Guarantor
The tool is easy to use and competitively priced.
It allows for optimal cash flow management without getting into accounting details.

The support is very effective (which is essential)!
Shams Fantar
Executive @ DYNDATA
Excellent software, very useful for obtaining data in real time and effortlessly. Easy to set up.
Sylvain Forte
CEO @ SESAMm
FAQ

Everything you need to know about cash management as SaaS

Answers to the questions you ask us most often.
How to choose cash management software for a SaaS company?
To choose the right SaaS cash management software, start by analyzing your specific needs: subscription transaction volume, number of products, integrations with your CRM and billing tools. Fygr may be a relevant solution for tech startups and scale-ups.
What are the advantages of cash management software over Excel for a SaaS company?
Cash management software offers complete automation of SaaS financial processes, significantly reducing forecasting errors. Unlike Excel, it allows you to track crucial metrics such as cash flow related to operations, financing, and investment in real time. Dashboards are dynamic, integrations with automatic billing tools are seamless, and bank synchronization is instantaneous. The ability to simulate growth scenarios becomes a real strategic asset.
How to make reliable cash flow forecasts for a SaaS company?
To make reliable forecasts in the SaaS sector, collect accurate historical data on your recurring revenue. Carefully analyze your churn rate, expansion revenue, and acquisition costs. Include all recurring costs: cloud infrastructure, developer salaries, marketing costs. Build different scenarios based on growth and churn assumptions. Use advanced projection methods that take into account the specific dynamics of technology companies.
How long does it take to implement cash management software for a SaaS startup?
Setup varies depending on the complexity of your technology infrastructure. For a young SaaS startup, deployment can take anywhere from a few hours to a few weeks. The speed depends on the number of bank accounts, tools to be integrated (CRM, billing), and the structure of your subscriptions. Fygr offers rapid implementation tailored to the constraints of technology companies, with personalized support.
How much does cash management software cost for a SaaS company?
At Fygr, prices are tailored to the realities of tech startups, with packages starting at €59 per entity. Pricing takes into account the specific nature of SaaS models: multi-product tracking, subscription management, runway projection. Fygr positions itself as an affordable solution offering advanced features for tech companies.
Who are Fygr's competitors in the SaaS sector, and which one should you choose?
Fygr's main competitor is Agicap, which is well-known but often perceived as very complex and much less affordable financially speaking.
How do I know if my SaaS company needs cash management software?
Your SaaS company needs this type of software if you encounter: difficulties in projecting your financial runway, significant time spent on Excel spreadsheets, a lack of visibility on your growth metrics, challenges in tracking multiple products or multiple countries. This is particularly relevant if your MRR exceeds €50K per month or if you are preparing to raise funds.