What Is a SaaS Company? The Complete Australian Guide (2026)

By the Accountsly team, accountants working day-to-day with SaaS companies across Australia. Reviewed for accuracy. Last updated August 2026.

If you’ve typed “SaaS company” into Google, you’ve probably already heard the buzzword thrown around at a networking event or seen it on a LinkedIn bio. What you’re actually after is a straight answer: what a SaaS company is, how it’s different from an ordinary software business, what makes one succeed or fail financially, and — if you’re building one in Australia — what you need to get right from day one. That’s what this guide covers, without the filler.

A SaaS company (Software as a Service company) is a business that builds software, hosts it centrally on its own or cloud infrastructure, and sells access to that software to customers on a recurring subscription basis, rather than selling a copy of the software outright. Instead of installing a program on your own computer and owning a licence forever, you log in through a browser, pay monthly or annually, and the SaaS company keeps the product running, updated, and secure behind the scenes.

That one sentence covers the mechanics. The rest of this guide covers what actually matters if you’re trying to understand, evaluate, work for, invest in, or run a SaaS company — including the financial and compliance realities that most explainer articles skip entirely, which is where our experience as accountants to SaaS businesses becomes genuinely useful rather than just another definition.

What Is a SaaS Company?

A SaaS company delivers its product as a hosted, subscription-based service over the internet. Three things distinguish a true SaaS company from a business that merely uses software in its operations:

1. Software is the product, not just a tool the business uses internally.
2. Revenue is recurring and subscription-based — typically monthly or annual billing — rather than one-off project fees or unit sales.
3. The company hosts and maintains the infrastructure, so customers never install anything or manage servers themselves.

If all three are true, you’re looking at a SaaS company. If only one or two apply, you’re probably looking at a services business that happens to use software, or a traditional software licensor — both worth understanding, because the label changes how the business should be run, priced, and even valued.

How a SaaS Company Actually Works

Every SaaS company, from a two-person bootstrapped tool to an ASX-listed platform, runs on the same basic loop:

1. Build once, serve many. The software is built on shared (multi-tenant) or dedicated (single-tenant) cloud infrastructure, so the SaaS company can serve thousands of customers from one codebase rather than shipping a separate install for each buyer.
2. Customers access it remotely. Users log in through a browser or app — nothing is installed locally, and nothing is shipped on a disc or download link the customer has to manage.
3. Billing is recurring. Customers pay a subscription fee — weekly, monthly, or annually — to keep access. Stop paying, lose access. That’s the core trade for the customer: lower upfront cost and someone else managing the technical burden, in exchange for ongoing payments and less ownership.
4. The SaaS company owns the operational burden. Uptime, security patching, backups, scaling for demand spikes, and feature updates are the SaaS company’s responsibility, not the customer’s IT department’s.
5. Growth compounds through retention, not just new sales. Because revenue is recurring, a SaaS company’s health depends heavily on keeping existing customers subscribed (retention) as much as it depends on signing new ones (acquisition) — a dynamic that shapes almost every financial decision the business makes.

This loop is why the SaaS company model has become the default way software gets sold. It’s also why the financial mechanics of a SaaS company look genuinely different from a typical services or product business — something we’ll get into in detail later in this guide, because it’s the part most explainers leave out entirely.

SaaS Company vs Traditional Software Company: What’s the Difference?

People often use “software company” and “SaaS company” interchangeably, but they’re not the same thing. A traditional software company typically sells a licence — you pay once (or occasionally for major version upgrades), install the program yourself, and you’re responsible for your own updates, hosting, and maintenance. A SaaS company sells ongoing access, hosts everything centrally, and earns its revenue in instalments over the life of the customer relationship.

if you’re being told a business is “basically a SaaS company” because it uses cloud software internally, that’s not the same thing. A genuine SaaS company’s product is the software, sold as a service, and its whole operating and financial model is built around that.

Types of SaaS Companies

Not every SaaS company looks the same. Understanding the categories helps you benchmark the right comparisons — a horizontal SaaS company and a vertical SaaS company are judged on different metrics, target different markets, and often need different financial structures.

Horizontal SaaS Companies

A horizontal SaaS company serves a broad function that applies across almost every industry — think project management, communication, or accounting software itself. The customer base is wide, the total addressable market is large, and competition tends to be intense because the category attracts many players.

Vertical SaaS Companies

A vertical SaaS company goes deep into a single industry, building workflows specific to that sector — construction, healthcare, hospitality, life sciences. The customer base is narrower, but the product usually embeds more deeply into how that industry actually operates, which tends to produce lower churn and stronger pricing power.

Micro-SaaS Companies

A micro-SaaS company is a small, often solo-founded or bootstrapped product solving one narrow, well-defined problem for a niche audience. Micro-SaaS companies have become increasingly common because cloud infrastructure has made it cheap to build and ship a focused tool without raising venture capital — though the financial discipline required to run one profitably is just as real as at any larger SaaS company.

Platform SaaS Companies

Some SaaS companies evolve into platforms — offering an ecosystem of integrations, an API, and sometimes a marketplace of third-party add-ons built on top of their core product. This model changes the growth dynamics again, because revenue can come from the core subscription plus a share of the ecosystem built around it.

The SaaS Company Business Model: How Revenue Actually Works

The subscription is the headline, but the pricing structure underneath it varies significantly between SaaS companies, and the choice has real downstream effects on cash flow, forecasting, and even how an accountant needs to treat the revenue.

Most established SaaS companies land on tiered or hybrid pricing because it balances predictability (a base subscription) with expansion revenue (upsells as customers grow). The pricing model a SaaS company chooses also determines how “lumpy” its cash flow is and how complex its revenue recognition needs to be — a detail that matters enormously once you’re the one doing the books, and one we’ll come back to shortly.

Key Metrics Every SaaS Company Tracks

If you take one section of this guide seriously, make it this one. The metrics below are what separates a genuinely healthy SaaS company from one that looks fine on the surface but is quietly in trouble.

These aren’t vanity numbers. They’re the metrics that determine whether a SaaS company can raise capital, what multiple it might sell for, and — most practically — whether it has enough cash in the bank next quarter. A SaaS company that doesn’t track these properly is flying blind, and we see this constantly in early-stage clients who come to us after growing revenue nicely but with no real visibility into churn or margin.

Real SaaS Company Examples: Australia and Beyond

Understanding the definition is one thing; seeing it in practice makes it concrete. Australia has produced a genuinely strong list of SaaS companies, several of which are recognised globally.

Globally, familiar examples include Salesforce (CRM), Slack (communication), and Zoom (video conferencing) — each a SaaS company because the software itself is the product, delivered on a recurring subscription, hosted centrally. This is useful context if you’re trying to explain the model to someone unfamiliar with it: point to Canva or Xero, and the definition clicks immediately for an Australian audience in a way a US-only example set doesn’t.

How to Start a SaaS Company in Australia

If you’re not just researching the definition but actually building a SaaS company in Australia, the process has both the general startup steps and some SaaS-specific ones. Here’s the realistic sequence, based on what we see clients actually go through.

1. Validate the problem before you build. The most common reason a SaaS company fails isn’t bad code — it’s building something nobody was paying for a solution to in the first place.
2. Choose your business structure and register with ASIC. Most SaaS companies in Australia operate as a proprietary limited company (Pty Ltd), registered through the Australian Securities and Investments Commission. This affects liability, how you raise capital later, and your tax obligations.
3. Set up your ABN and, once you cross the threshold, GST registration. GST generally applies to a SaaS company’s Australian subscription sales once you’re registered, with different rules potentially applying to overseas customers — this is a genuinely common area of confusion, and getting it wrong early creates a messy catch-up job later.
4. Choose your billing and subscription infrastructure early. Platforms like Stripe or Chargebee handle recurring billing, but they need to be properly reconciled against your accounting system (commonly Xero for Australian SaaS companies) from day one, not retrofitted after 200 customers.
5. Build a proper chart of accounts for a subscription business. A generic small-business chart of accounts doesn’t cleanly separate MRR, deferred revenue, and churn-related adjustments — a SaaS company needs a structure built for subscription accounting from the start.
6. Understand revenue recognition before you take your first annual payment. If a customer pays $1,200 upfront for a 12-month plan, that’s not $1,200 of revenue on day one — it needs to be recognised progressively across the year under standard accounting practice (AASB 15 in Australia). Get this wrong and your monthly financials will lie to you.
7. Track your core SaaS metrics from month one, even at tiny scale — MRR, churn, and CAC are far easier to build good habits around early than to reconstruct two years in.
8. Look into the R&D Tax Incentive if your SaaS company is doing genuine technical R&D (not just standard feature development) — many early-stage Australian SaaS companies leave this money unclaimed simply because nobody flagged eligibility.
9. Plan for compliance rhythm, not just build velocity — BAS lodgements, payroll tax thresholds if you’re hiring, and annual company obligations don’t pause while you’re shipping features.

Common Challenges Every SaaS Company Faces

No SaaS company is immune to these, regardless of size. The ones that survive tend to be the ones that see these coming.

• Churn. Because there’s no long-term lock-in contract for most SaaS companies, customers can leave at any renewal point. Acquiring a new customer is typically far more expensive than retaining an existing one, so churn left unmanaged quietly erodes growth.
• Cash flow mismatch between billing and recognised revenue. A SaaS company can look “profitable” on a cash basis in a month with lots of annual renewals, then look weak the following month — without the underlying business actually changing. This is one of the most common sources of founder confusion we see.
• Underpricing early. Many first-time SaaS company founders price too low to seem competitive, then struggle to raise prices on an existing customer base without triggering churn.
• Scaling infrastructure and support costs. Growth that isn’t matched by margin discipline can quietly compress a SaaS company’s gross margin even as revenue climbs.
• Compliance drift. GST, payroll tax, and company reporting obligations don’t scale down for a fast-growing SaaS company — they scale up, often faster than founders expect.
• Multi-currency and multi-jurisdiction complexity. A SaaS company selling into the US, UK, and EU from an Australian base has to manage foreign currency billing, potential VAT/GST obligations abroad, and consolidated reporting — a genuinely technical accounting problem, not a spreadsheet afterthought.
• Founder burnout from doing the books themselves. This is common and understandable in the first 12–18 months, but it’s also one of the most expensive false economies a growing SaaS company can run — founder time spent reconciling Stripe payouts is founder time not spent on the product or customers.

The Financial and Accounting Reality of Running a SaaS Company (Australia)

This is the section most “what is a SaaS company” guides skip entirely — because it’s written by marketers, not by the accountants who actually sit inside these businesses’ books every month. It’s also where our experience is genuinely relevant, so we’ll be specific rather than vague.

Revenue Recognition Isn’t Optional

Under Australian accounting standards (AASB 15), a SaaS company generally can’t recognise a full annual subscription payment as revenue the moment it’s received. Instead, revenue is recognised progressively as the service is delivered — month by month across the subscription term. Get this wrong, and your profit and loss statement will overstate revenue in months with lots of annual renewals and understate it in quieter months, making it impossible to see your SaaS company’s real trajectory.

Deferred Revenue Needs Its Own Line

The unearned portion of prepaid subscriptions sits on the balance sheet as deferred revenue (a liability, not income) until it’s earned. A SaaS company that doesn’t track this properly will consistently misjudge how much cash is genuinely “theirs” to spend versus owed in future service delivery.

GST on Subscription Billing

GST generally applies to a SaaS company’s subscription sales to Australian customers. Sales to overseas customers can be treated differently depending on the circumstances, and getting the classification wrong across a large customer base can mean a costly BAS correction later. This is one of the single most common issues we resolve for SaaS company clients in their first year.

Reconciling Subscription Billing Platforms

Stripe, Chargebee, Paddle, and similar platforms generate their own transaction records, fees, refunds, and payout timing — none of which map cleanly onto a standard bank feed. A SaaS company’s bookkeeping needs to properly reconcile the billing platform against the accounting system, or the numbers in Xero simply won’t match reality.

Building a SaaS-Specific Chart of Accounts

A SaaS company benefits enormously from a chart of accounts that separates recurring subscription revenue from one-off revenue (implementation fees, professional services), tracks cost of goods sold specific to hosting and support, and makes MRR/ARR reporting straightforward to pull rather than manually rebuilt every board meeting.

The R&D Tax Incentive

Many Australian SaaS companies are eligible for the R&D Tax Incentive on genuine technical development work, yet a significant number never claim it because nobody on the team realised it applied to software development, not just laboratory science.

Fractional CFO Support Earlier Than You’d Think

Founders often assume CFO-level support is something a SaaS company “graduates into” once it’s large. In practice, the SaaS companies that scale most cleanly tend to bring in fractional CFO input around the Seed to Series A range — exactly when metrics like NRR, CAC payback, and burn multiple start determining whether the next funding round is easy or painful.

Illustrative Case Studies: How the Numbers Play Out for a SaaS Company

The following scenarios are illustrative composites based on patterns we commonly see with SaaS company clients, used here to demonstrate real financial dynamics rather than to represent a single identified business.

Case Study 1 — The Annual-Billing Cash Flow Trap

A vertical SaaS company selling workflow software to trade businesses grew revenue nicely in its second year by pushing customers toward annual plans. On paper, cash in the bank looked strong. But because the business was recognising the full annual payment as revenue upfront rather than spreading it over 12 months, its monthly profit and loss didn’t reflect reality — a quiet month with no renewals looked like a loss, alarming the founders unnecessarily. Correcting revenue recognition and separating deferred revenue on the balance sheet gave the founders an accurate, calm view of monthly performance for the first time, and let them forecast hiring decisions with real confidence instead of guessing off cash in the bank.

Case Study 2 — The Underpriced SaaS Company

A horizontal SaaS company had strong customer growth but flat margins for 18 months. A review of unit economics showed CAC had crept up as the business scaled paid acquisition, while pricing hadn’t moved since launch. Modelling a tiered price increase alongside grandfathering existing customers on legacy pricing allowed the business to lift blended revenue per customer by roughly a third over two quarters, with churn increasing only marginally — a trade-off the founders hadn’t realised was available to them because nobody had modelled it against their actual customer cohort data.

Case Study 3 — Cross-Border GST Cleanup

A SaaS company selling internationally from an Australian base had been applying GST inconsistently across its customer base, in part because its billing platform wasn’t configured to classify domestic versus overseas customers correctly. A structured review and correction of the GST treatment across historical invoices, along with reconfiguring the billing platform’s tax rules going forward, avoided a materially larger correction at year-end and gave the founders confidence their BAS lodgements were finally accurate.

SaaS Company Statistics Worth Knowing

• Genuine SaaS companies typically run gross margins in the 70–85% range — materially higher than most traditional product or services businesses, which is part of why the model attracts investor interest.
• Acquiring a new customer is widely understood across the industry to cost significantly more than retaining an existing one, which is why churn management is treated as a first-order priority for most SaaS companies rather than a secondary metric.
• Net Revenue Retention above 100% is generally treated as a strong signal by investors, because it means a SaaS company’s existing customer base alone is growing revenue before any new customer is added.
• The “Rule of 40” (growth rate plus profit margin should exceed 40%) is a widely referenced rough benchmark investors use to judge whether a SaaS company is growing efficiently rather than just growing expensively.
• Australia’s broader SaaS and software sector has grown substantially over the past decade, with cities like Sydney and Melbourne hosting large, active communities of SaaS companies ranging from early-stage startups to globally recognised players like Canva and Atlassian.

Choosing the Right Financial Partner for Your SaaS Company

If you’ve read this far, you understand what a SaaS company is, how the model works, and — critically — why its financial mechanics are genuinely different from a typical small business. That last part is where most generalist bookkeepers and accountants fall short: they can produce a balance sheet, but they haven’t necessarily worked through deferred revenue schedules, Stripe reconciliation, multi-currency SaaS billing, or R&D Tax Incentive eligibility for a subscription software business specifically.

This is the exact gap Accountsly was built to close. We work with SaaS companies across Australia on:

• SaaS-specific bookkeeping and monthly accounting, with a chart of accounts and reporting structure built around MRR, ARR, and deferred revenue — not retrofitted from a generic small-business template.
• GST and BAS compliance for subscription billing, including cross-border sales complexity.
• Fractional CFO support, covering cash flow forecasting, pricing and unit economics modelling, and board-ready reporting.
• Tax planning, including R&D Tax Incentive eligibility review where applicable.
• Billing platform reconciliation (Stripe, Chargebee, and similar) against Xero, so the numbers you see actually match what happened.

If you’re running a SaaS company and your monthly numbers still feel like a guess rather than a genuine read on the business, that’s usually a sign the accounting hasn’t caught up to the business model — a very fixable problem.

Book a discovery call with Accountsly → or see our SaaS Accounting services in detail →

Frequently Asked Questions About SaaS Companies

1. What does SaaS actually stand for? SaaS stands for Software as a Service — a model where a SaaS company delivers software to customers over the internet on a subscription basis, rather than selling a copy for local installation.

2. What is a SaaS company in one sentence? A SaaS company is a business that builds, hosts, and sells access to software over the internet on a recurring subscription basis.

3. Is Netflix a SaaS company? Netflix is often used as a loose comparison because it’s subscription-based and cloud-delivered, but it’s more accurately classified as a streaming media company; the term SaaS company is generally reserved for businesses whose product is software functionality (like project management, CRM, or accounting tools) rather than media content.

4. Is Canva a SaaS company? Yes. Canva is a strong Australian example of a SaaS company — cloud-hosted design software sold on a freemium and subscription basis.

5. Is Xero a SaaS company? Yes. Xero is a vertical SaaS company delivering accounting software to small businesses on a subscription basis, hosted entirely in the cloud.

6. What’s the difference between a SaaS company and a tech company? “Tech company” is a broad umbrella that includes hardware businesses, marketplaces, and app developers; a SaaS company is a specific subset defined by the subscription, cloud-hosted software delivery model.

7. What’s the difference between B2B SaaS and B2C SaaS companies? A B2B SaaS company sells to other businesses (typically higher price points, longer sales cycles, lower churn), while a B2C SaaS company sells to individual consumers (typically lower price points, higher volume, higher churn).

8. How do SaaS companies make money if the software is often free to try? Most SaaS companies use freemium or trial models to reduce the barrier to entry, then convert a percentage of users to paid tiers — the economics work if the customer lifetime value of paying users comfortably exceeds the cost of supporting the free tier.

9. Why do SaaS companies focus so much on churn? Because revenue is recurring, losing an existing customer doesn’t just cost one sale — it removes an ongoing revenue stream that the SaaS company already spent money to acquire, making churn one of the most expensive problems in the model if left unmanaged.

10. What is MRR and why does it matter for a SaaS company? MRR (Monthly Recurring Revenue) is the predictable revenue a SaaS company collects each month from active subscriptions; it’s the core health metric because it strips out one-off or lumpy revenue to show the underlying trajectory.

11. What’s a good churn rate for a SaaS company? It varies significantly by segment — enterprise SaaS companies often target annual churn in the low single digits, while consumer or low-price SaaS companies may tolerate materially higher churn if acquisition costs are low enough to compensate.

12. Do SaaS companies need to charge GST in Australia? Generally, yes, on sales to Australian customers once GST-registered; treatment of sales to overseas customers can differ, so this is worth reviewing with an accountant familiar with digital subscription GST rules specifically.

13. How is revenue recognised for a SaaS company’s annual subscription plans? Under standard Australian accounting practice, revenue from an annual plan is recognised progressively over the 12-month service period, not all at once when the payment is received.

14. What is deferred revenue for a SaaS company? Deferred revenue is the portion of a customer’s payment that hasn’t yet been “earned” because the service period it relates to hasn’t been delivered yet; it sits on the balance sheet as a liability until it converts to recognised revenue over time.

15. Do I need to register my SaaS company with ASIC? If you’re operating as a company structure in Australia, yes — regardless of the fact that your product is software, you need to register with the Australian Securities and Investments Commission and meet ongoing reporting obligations.

16. Can a SaaS company claim the R&D Tax Incentive? Many Australian SaaS companies doing genuine technical development can be eligible, though eligibility depends on the nature of the work; it’s worth a specific review rather than assuming either way.

17. What accounting software do most Australian SaaS companies use? Xero is very commonly used by Australian SaaS companies, often paired with a subscription billing platform like Stripe or Chargebee that needs to be properly reconciled against it.

18. How much does it typically cost to outsource accounting for a SaaS company? It varies with scale and complexity, but outsourced or fractional models are generally significantly cheaper than hiring an equivalent in-house finance team at early stages, while still providing SaaS-specific expertise.

19. What is ARR and how is it different from MRR? ARR (Annual Recurring Revenue) is simply MRR multiplied by 12; it’s the figure most commonly used in investor conversations and valuation discussions for a SaaS company.

20. What is Net Revenue Retention and why do investors care? NRR measures revenue growth or loss from an existing customer base (including upsells, downgrades, and churn); an NRR above 100% signals a SaaS company can grow even without adding new customers, which investors view very favourably.

21. What is a reasonable gross margin for a SaaS company? Genuine SaaS companies typically target 70–85% gross margins; materially lower margins can indicate the business is more services-heavy than the SaaS label suggests.

22. What’s the Rule of 40 and how does it apply to SaaS companies? It’s a rough benchmark suggesting a healthy SaaS company’s growth rate percentage plus profit margin percentage should add up to roughly 40 or more, used as a quick gut-check on growth efficiency.

23. What’s the difference between horizontal and vertical SaaS companies? A horizontal SaaS company serves a broad function across many industries (e.g. project management), while a vertical SaaS company builds deep, industry-specific workflows for one sector.

24. What is micro-SaaS? Micro-SaaS refers to small, often solo-founded or bootstrapped SaaS companies solving one narrow problem for a niche audience, typically without external venture funding.

25. How long does it take to build a SaaS company from idea to paying customers? This varies enormously depending on complexity, but many founders aim to validate demand and reach first paying customers within a few months of committed building, rather than spending a year in stealth development.

26. What’s the biggest reason SaaS companies fail? Commonly cited reasons include building something the market doesn’t sufficiently want, running out of cash before finding sustainable unit economics, and losing customers faster than the business can replace them (excessive churn).

27. Should a SaaS company hire a bookkeeper or a full accountant first? Most early-stage SaaS companies benefit from outsourced bookkeeping plus periodic accountant oversight rather than a full-time hire, scaling up to fractional CFO support as metrics and fundraising complexity increase.

28. Can a SaaS company operating in multiple countries manage its own multi-currency accounting? It’s possible at very small scale, but multi-currency, multi-jurisdiction accounting (including foreign GST/VAT obligations) becomes genuinely complex quickly, and most growing SaaS companies bring in specialist support before it becomes a compliance risk.

29. What financial reports should a SaaS company review monthly? At minimum: MRR/ARR trend, churn and NRR, cash flow and runway, and a profit and loss statement that correctly reflects deferred revenue rather than lumpy cash receipts.

30. Is it worth getting a fractional CFO for an early-stage SaaS company? For many SaaS companies, yes, particularly from Seed to Series A stage, because the metrics investors scrutinise (NRR, CAC payback, burn multiple) are exactly the areas a fractional CFO can help get right before a raise, rather than fixed under pressure during due diligence.

31. What’s the difference between a SaaS company and a Platform-as-a-Service (PaaS) provider? A SaaS company sells a finished software application to end users; a PaaS provider sells infrastructure and tools that other companies (including SaaS companies) build their own applications on top of.

32. Does every SaaS company need venture capital funding? No — many profitable, sustainable SaaS companies (particularly micro-SaaS and some vertical SaaS companies) are bootstrapped and never raise external capital, funding growth from their own subscription revenue instead.

33. Is Facebook a SaaS company?

    Facebook is not typically classified as a traditional SaaS company. Facebook is primarily a social media and technology platform that provides its services through the internet. While it uses a cloud-based, subscription-like software delivery infrastructure in parts of its business, users generally access Facebook as a free consumer platform rather than paying a recurring subscription for the core product. Therefore, Facebook is better described as a social media platform and technology company rather than a pure SaaS company.

    34 Is Amazon a SaaS company?

    Amazon is not primarily a SaaS company. Amazon is a diversified technology and e-commerce company with businesses including online retail, logistics, digital entertainment, advertising, and cloud computing. However, Amazon Web Services (AWS) offers many SaaS products and cloud-based services. Amazon itself is therefore better classified as a technology and e-commerce company, while AWS operates extensively across IaaS, PaaS, and SaaS.

    35. Is Instagram a SaaS company?

    Instagram is generally not considered a SaaS company. It is a social media platform owned by Meta that provides users with internet-based access to its software. Although Instagram is cloud-based and delivered as an online service, its primary business model is advertising rather than selling software subscriptions. Therefore, Instagram is better categorized as a social media platform, not a traditional SaaS company.

    36. Is Shopify a SaaS company?

    Yes, Shopify is a SaaS company. Shopify provides cloud-based e-commerce software that businesses access through the internet, usually through recurring subscription plans. Merchants can use Shopify to build online stores, manage products, process orders, accept payments, and operate their e-commerce businesses without installing and maintaining the underlying software themselves. This subscription-based, cloud-delivered model makes Shopify a strong example of a SaaS company.

    37. What’s the difference between SaaS and PaaS?

    SaaS (Software as a Service) provides complete, ready-to-use software applications over the internet, while PaaS (Platform as a Service) provides developers with a cloud environment for building, testing, deploying, and managing applications.

    For example, Shopify, Salesforce, and Google Workspace are examples of SaaS products. PaaS offerings provide the development tools, runtime environment, databases, and infrastructure developers need to create their own applications.

    In simple terms:
    SaaS = Use the software
    PaaS = Build software

    38. hat’s the difference between SaaS and IaaS?

    SaaS (Software as a Service) gives users access to complete software applications, while IaaS (Infrastructure as a Service) provides fundamental computing resources such as virtual machines, storage, networking, and servers through the cloud.

    With SaaS, the provider manages almost everything behind the application, allowing customers to simply use the software. With IaaS, customers have much more control over the operating systems, applications, and configurations they deploy.

    In simple terms:
    SaaS = Ready-to-use software
    IaaS = Cloud infrastructure for running software

Final Word

A SaaS company isn’t just “a business with an app.” It’s a specific, well-understood model built around hosted software, recurring subscription revenue, and a genuine ongoing relationship with the customer — and the businesses that treat every part of that model seriously, including the accounting side most guides ignore, are the ones that scale cleanly rather than lurching from cash-flow surprise to cash-flow surprise. Whether you’re evaluating a SaaS company as an investor, working for one, or building your own, understanding the model end-to-end — including the numbers behind it — is what separates informed decisions from guesswork.

If you’re running a SaaS company in Australia and want your financials to actually reflect the business you’re building, that’s exactly the conversation we have with founders every week.

Talk to Accountsly about SaaS company accounting →