SaaS · 🇬🇧 United Kingdom
Board saw ARR, statutory accounts said something else
Annual prepayments recognised on receipt made the statutory accounts and the board pack tell different stories.
UK SaaS, £2.4m ARR, annual and monthly plans. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
£2.4m
ARR reconciled to statutory
38%
Of billings were deferred
1
Reconciling bridge introduced
The situation
- The board tracked ARR from the billing system while statutory accounts were prepared on an accruals basis.
- Nobody could explain the gap between the two, which undermined confidence in both.
What we found
- Annual plans billed up front were recognised on receipt in management reporting.
- 38% of billings in the period related to future service.
- No bridge existed between ARR, billings, and recognised revenue.
What we did
- Implemented deferred revenue properly and recognised over the subscription term.
- Built a standing bridge from ARR to billings to recognised revenue, reported monthly.
- Aligned the board pack to the same underlying ledger as the statutory accounts.
The outcome
- The board and the statutory accounts now reconcile through an explicit bridge rather than diverging silently.
- The finance lead can explain any gap in one slide, which is what the board actually wanted.
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