The Software as a Service industry is booming.
Recent estimates show that the global SaaS market size is projected to reach $1298.92 billion by 2030, growing at a CAGR of 19.7% in the period between 2023 and 2030.
However, in today’s SaaS world where businesses use some type of software to complete every task, it’s easy to face SaaS compliance issues.
A simple mistake could expose your company to severe security threats and risks.
To avoid all these, B2B SaaS businesses must always strive to be compliant with the latest rules and regulations in the industry.
In this article, you’re going to learn about what B2B SaaS compliance is, why it’s important, and how to ensure your SaaS is compliant with all regulations at all times.
Let’s get started.
What is B2B SaaS Compliance?
B2B SaaS compliance is when a business undertakes its daily operations in accordance with the accepted financial, security, and data protocols, guidelines, and requirements.
The regulations could dictate how a business calculates taxes, how it collects and uses customer data, revenue recognition, and many more.
Even though some of these regulations aren’t obligatory, complying with them can be beneficial for your business in many ways.
For instance, being SaaS compliant helps to enhance security in your infrastructure which helps to protect your customers’ data from external threats.
This helps to build trust with your customers, which helps to grow your B2B SaaS business.
Importance of B2B SaaS Compliance
Today, many organizations use a couple of SaaS platforms. Even though these platforms add value to your organization, they could potentially expose your organization’s and customers’ data to security risks.
Here are the reasons to ensure compliance with SaaS regulations.
- Helps you conduct business operations as per the industry standards
- It’s a proactive security risk management approach
- Helps to build trust and confidence with potential investors which increases the chances of getting SaaS funds
- Helps to avoid legal consequences such as expensive lawsuits and fines
B2B SaaS Compliance Standards and Certifications You Need to Know
To keep your B2B SaaS complaint at all times, you must meet the following certifications and regulations.
1. ASC 606
This is one of the top financial SaaS compliance regulations that dictates how subscription businesses report their revenue from multiple revenue streams.
The certification was specifically developed for subscription-based business models. Thus, leveraging a subscription management solution like Younium can help to ensure your SaaS business is compliant with this standard.
The ASC 606 standard affects public companies, non-profits, and private SaaS businesses.
2. GAAP
This is also another financial compliance standard created by the Financial Accounting Standards Board. It is a framework of commonly-followed accounting rules and practices to ensure transparency in your financial reporting.
3. IFRS
International Financial Reporting Standards(IFRS) comprises a collection of globally recognized accounting rules.
The rules are set to ensure public companies stay transparent and consistent with their financial statement reporting.
The IFRS standard is applicable in jurisdictions such as the European Union, Brazil, South Korea, etc. whereas GAAP is applicable in the United States.
4. SOC 2 Certification
This is a security compliance standard that demonstrates your seriousness in the controls your business puts when it comes to the availability, processing, and security of customer data and privacy.
5. PCI DSS Certification
This security compliance certification shows that your business has set up systems to secure cardholder data to minimize the chance of credit card fraud.
It was specifically developed for businesses that accept payments through credit cards including Visa and Mastercard.
Pro tip: To stay compliant with these regulations, invest in a robust recurring billing software solution that’s equipped with payment and transaction security to protect your customers’ data from data breaches, identity theft, and other threats. Here is a list of the best recurring billing systems compiled by Attrock.
6. GDPR
The General Data Protection Regulation dictates how businesses handle, store, and process customer data. This data security compliance standard gives European Union citizens complete control over their data.
The regulation also applies to organizations that handle international transactions.
7. HIPAA
HIPAA is a data protection law that states that sensitive patient health information should be shared with the consent or knowledge of the patient. That means the patient must be aware before their information is shared with anyone.
The regulation was developed by the US Department of Health and Human Services to give patients complete control over their information.
Best Practices for B2B SaaS Compliance
Follow these SaaS compliance tips to stay compliant with the latest regulations and standards.
- Leverage automation software
- Designate a chief compliance officer to handle regulatory compliance issues
- Ensure collaboration between the compliance department and other key departments like IT and human resources
- Adhere to CIS benchmarks
- Create secure software solutions
- Educate and train employees about SaaS compliance
- Leverage encryption for sensitive data
Lastly, you can stay compliant with these standards and regulations by using a business formation service that can guide you through every step of your business from the moment of launching to when you start operating it.
Read this post by SmallBusinessHQ to discover the most popular business formation services you can use for your B2B SaaS launch.
Conclusion
Ensuring your B2B SaaS business is compliant with the latest industry regulations doesn’t have to be complicated.
All you need to do is to understand the certification standards and regulations you’re required to follow and the best practices to stay compliant with these regulations.
