{"id":13395,"date":"2022-07-21T15:21:00","date_gmt":"2022-07-21T19:21:00","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=13395"},"modified":"2026-02-12T04:28:37","modified_gmt":"2026-02-12T09:28:37","slug":"how-saas-companies-should-prepare-for-an-ipo","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/how-saas-companies-should-prepare-for-an-ipo\/","title":{"rendered":"How SaaS companies should prepare for an IPO"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tHow SaaS companies should prepare for an IPO\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2022-07-21T15:21:00-04:00\">July 21, 2022<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"How SaaS companies should prepare for an IPO\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/how-saas-companies-should-prepare-for-an-ipo\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/david-appel\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/07\/David-Appel-headshot-2023-1.jpg\" class=\"entry-author__image\" alt=\"David headshot\" \/>\t\t\t\t<span class=\"entry-author__name\">David Appel<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p>Wow, an IPO is a massive milestone! It signifies that your company is a clear forerunner in its market and that it\u2019s run and managed effectively. Going public is something a company\u2019s leadership can be incredibly proud of.<\/p>\n\n\n\n<p>But becoming publicly traded also introduces unique challenges. You\u2019ll be dealing with a whole new world of logistical challenges, regulatory obligations, and forecast predictability that you\u2019ll need to scale and make compliant.<\/p>\n\n\n\n<p>This article shares three of the most valuable and essential steps any recurring revenue company can take to prepare for its IPO.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-compliance-1-nbsp-put-robust-internal-controls-in-place\">Compliance 1:&nbsp; Put Robust Internal Controls in Place<\/h3>\n\n\n\n<p>Establishing and maintaining a series of internal controls is essential for any company with multiple employees and complex or overlapping processes.<\/p>\n\n\n\n<p>However, making the leap to publicly traded means that internal controls will become more important than ever. The loss of investor confidence resulting from even a single compliance-related or transactional oversight can be significant and very difficult to recover from.<\/p>\n\n\n\n<p>After all, going public also means that your company needs to devote more attention than ever to managing its public image and persona. As a CFO, you can protect your company\u2019s reputation and avoid regulatory oversights by putting controls around:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Approvals.<\/strong> Make sure you follow and actively approve different transactions and activities as needed. Also, make sure that everyone else understands what they do and don\u2019t have approval to do.<\/li>\n\n\n\n<li><strong>Custom workflows.<\/strong> No two companies are exactly alike, which becomes especially apparent during an IPO. Make sure you have the flexibility to meet your precise needs.<\/li>\n\n\n\n<li><strong>Audit Trails.<\/strong> Audit trails are essential in helping you give objective, verifiable proof that no individual has sole control over 100% of a transaction. This is very important in maintaining honesty regarding reporting and related areas.<\/li>\n<\/ul>\n\n\n\n<p>As a SaaS CFO, it\u2019s up to you to ensure that your company has the appropriate internal control architecture.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-compliance-2-get-up-to-speed-with-sox\">Compliance 2: Get Up to Speed with SOX<\/h3>\n\n\n\n<p>SOX (the Sarbanes-Oxley Act) is a law that was enacted in 2002. It contains various provisions and requirements around corporate financial reporting and record-keeping.<\/p>\n\n\n\n<p>SOX was signed into law to keep companies honest in these areas. Two of the most important sections as far as CFOs are concerned include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>SOX Section 302.<\/strong> This section fundamentally states that a company\u2019s CEO and CFO are legally accountable to the SEC for accurately reporting and documenting revenue. This means you\u2019re on the hook for any slip-ups at your company, so make sure there aren\u2019t any.<\/li>\n\n\n\n<li><strong>SOX Section 404.<\/strong> This portion of the law dictates that CEOs and CFOs specifically review and report on their company\u2019s internal structures. You are also required to be transparent about any shortcomings in your internal controls.<\/li>\n<\/ul>\n\n\n\n<p>These two sections of SOX are often the most challenging and costly for companies to integrate into their financial reporting. But our next tip will turn the process\u2013and the others we\u2019ve covered in this article\u2013into a breeze.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-predictability-nbsp-embrace-a-modern-accounting-workflow\">Predictability:&nbsp; Embrace a Modern Accounting Workflow<\/h3>\n\n\n\n<p>To get ready for your IPO, you must have everything in place to show investors that your company is streamlined and effective.<\/p>\n\n\n\n<p>An automated accounting SaaS can allow your company to achieve several vital IPO objectives at once, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: bold;\">Forecasting and reporting accurately and efficiently.<\/span> As we mentioned in the prior section, <a href=\"https:\/\/www.sage.com\/en-us\/blog\/\n\">these two tasks<\/a> are among the most critical functions for any public company to perform well consistently.<\/li>\n\n\n\n<li><strong>Automatically handling your tax structuring, FX, and more.<\/strong> When your company goes public, you\u2019re suddenly responsible for fielding new issues and obligations. How do you handle FX requirements effectively for non-U.S. investors? What about the changes in your tax status after your IPO? Accounting automation makes all of this a breeze.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Leveraging an AI-powered ledger for continuous close.<\/strong> Reopening a previous month\u2019s books to correct a mistake is every publicly-traded company\u2019s worst nightmare. With an AI-powered ledger, you can ensure that never happens to you.<\/li>\n\n\n\n<li><strong>Having a strategically-minded CFO at the helm.<\/strong> Investors must know that your company\u2019s C-suite employees are strategically involved and invested, rather than just passively reporting on numbers. How can any business be expected to deliver long-term growth otherwise.<\/li>\n<\/ul>\n\n\n\n<p>Automation helps make your company more presentable to investors. But it will also tremendously simplify your job as a subscription revenue CFO and bring you peace of mind during board and investor presentations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-learn-more\">Learn More<\/h3>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"h-as-much-as-we-ve-covered-about-preparing-for-an-ipo-it-s-only-the-tip-of-the-iceberg-click-here-to-learn-even-more\">As much as we\u2019ve covered about preparing for an IPO, it\u2019s only the tip of the iceberg. <a href=\"https:\/\/www.sage.com\/en-us\/sage-business-cloud\/intacct\/resources\/Infographics\/saas-company-growth-to-ipo-and-beyond\/\">Click here<\/a> to learn even more.<\/h5>\n\n\n\n<p><\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Wow, an IPO is a massive milestone! It signifies that your company is a clear forerunner in its market and that it\u2019s run and managed effectively. Going public is something a company\u2019s leadership can be incredibly proud of. But becoming publicly traded also introduces unique challenges. You\u2019ll be dealing with a whole new world of [&hellip;]<\/p>\n","protected":false},"author":1433,"featured_media":9190,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[158,348,43,44,48],"tags":[2,110,334,170,427,168],"business_type":[312,41],"lilypad":[],"context":[418,430],"industry":[57,55,450],"persona":[150,100,98,96,97],"imagine_tag":[209,436,443,434],"coauthors":[599],"class_list":["post-13395","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accountants","category-free-guides-templates","category-money-matters","category-strategy-legal-operations","category-technology-innovation","tag-accountants","tag-accounting-101","tag-automation","tag-business-strategy","tag-cfo","tag-sage-accounting","business_type-accountants","business_type-growing-business","industry-financial-services","industry-professional-services","industry-software-saas"],"sage_meta":{"region":"en-us","author_name":"David Appel","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-594203315.jpg","imagine_tags":{"209":"Accounting","436":"Intacct Accounting","443":"Intacct Large Business","434":"Large Business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/13395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1433"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=13395"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/13395\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/9190"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=13395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=13395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=13395"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=13395"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=13395"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=13395"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=13395"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=13395"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=13395"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=13395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}