Detailed Software-as-a-Service (SaaS) Financial Model Template With SaaS Overview Presentation
Originally published: 12/05/2022 09:07
Last version published: 13/05/2022 13:40
Publication number: ELQ-98100-2
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Detailed Software-as-a-Service (SaaS) Financial Model Template With SaaS Overview Presentation

Detailed SaaS Financial Model Template (3-Statement Model)

This is a detailed and easy-to-use Software-as-a-Service (SaaS) financial model. This is a modular financial model meaning that relevant calculations are separated into separate tabs that can be used to build a forecast for a SaaS company. More complex models at the most basic level are separated into 1) inputs; 2) calculations; and 3) outputs. In simplistic models, these items are often grouped into a single tab.

The model template does not overcomplicate the analysis by including too many inputs and assumptions, calculations, and outputs, but rather focuses on key inputs and assumptions required to derive the most relevant outputs (i.e. customer numbers, MRR, ARR, CAC, etc.).

Included is a financial model template and a brief SaaS overview presentation. The presentation is embedded in the financial model as well in the "Overview Presentation" tab.

I have used the following structural approach for every model that I have built, which users have always found to be clean, practical, easy to follow, and user-friendly. Sections may vary somewhat depending on the complexity of the model but the basic layout remains the same.

The sections of this model template are as follows:
1. Title Page: A brief description of the model’s purpose. Contact information can also be included here.

2. Summary Tab: Key SaaS metrics are presented here in graphical format, including forecast EBITDA and cash flow, Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV).

3. Assumptions Tab: Inputs and assumptions that drive the model, and include forecast financial information, customer-related assumptions, and financing inputs.

4. Financials Tab: A simple and easy-to-follow tab showing forecast customer account and ARR information as well as 3-financial statements (income statement, balance sheet and cash flow statements) for the next 10-years. Also included are supporting schedules showing capitalization, depreciation and working capital calculations and key SaaS metrics.

5. Monthly Billings Tab: Detailed but easy-to-follow monthly calculations for the next 10-years of customer numbers, total billings, MRR and deferred revenue. The critical item on this tab is the calculation of deferred revenue. Since the model differentiates between monthly and annual customer subscriptions, in accordance with revenue recognition accounting principles, revenue is only recognized when it is earned. Specifically, annual subscriptions with upfront payment only recognize revenues on a monthly basis thereby creating deferred revenue on the balance sheet.

6. Valuation Tab: Discounted cash flow valuation.

The model template utilizes 10 years for the forecast period. Again, this is a detailed but user-friendly model that forecasts financial and operating metrics for a SaaS company.

This Best Practice includes
Excel template; PDF presentation

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