Finance-Ops SOP

1. Pricing Strategy

Value-based pricing: price as a percentage of value delivered, not based on cost. Industry benchmark: 5-20% of the quantifiable value your product delivers to the customer.

Three-tier structure (standard SaaS pattern):

The middle tier is your target. Design the other tiers to make it look like the best value (decoy effect).

Source: FastSpring — Three-Tier Pricing, Maxio — SaaS Tiered Billing

2. Pricing Psychology (Cialdini, Ariely)

Anchoring: show the most expensive plan first (left to right or top to bottom). The high price anchors perception, making the middle tier feel reasonable.

Charm pricing:

• Consumer products: $9.99 beats $10 (left-digit bias)
• SaaS: use $49, $99, $199 — the 9-ending signals value, but round-ish numbers signal quality
• Avoid: $47, $97 (looks like an info-product scam)

Decoy effect (Ariely, "Predictably Irrational"): Add a "bad deal" tier that makes the target tier obviously superior. Classic example: The Economist's print-only subscription at the same price as print+web made 84% choose the combo.

Annual discount: offer 2 months free for annual billing (e.g., "$49/mo or $490/year — save $98").

• Improves cash flow (money upfront)
• Reduces churn (commitment locks users in)
• Show the monthly-equivalent price for annual plans ("$40.83/mo billed annually")

Source: NetSuite — Psychological Pricing, Omniaretail — Psychological Pricing

3. Financial Tracking

Day 1: open a separate business bank account. Do not mix personal and business finances.

Track monthly:

Tools: Wave (free accounting), or a simple spreadsheet with: date, category, amount, recurring (y/n). Do a monthly P&L review (takes 30 minutes).

4. Key SaaS Metrics

Source: Baremetrics — Calculate MRR, SaaS Academy — ARR vs MRR

5. Tax Basics

Set aside money immediately: reserve 25-30% of profit for taxes. Put it in a separate savings account so you don't accidentally spend it.

Quarterly estimated payments (US): if you expect to owe > $1,000 in taxes, pay quarterly (Apr 15, Jun 15, Sep 15, Jan 15). Penalties for underpayment are real.

International sales tax:

• US: sales tax varies by state; use Stripe Tax or TaxJar for automation
• EU: VAT collection required above threshold; use Paddle or Lemon Squeezy as Merchant of Record (they handle VAT for you)
• Simplest path: use a Merchant of Record (Paddle, Lemon Squeezy) — they handle all tax collection and remittance globally

Keep receipts: every business expense needs documentation. Use a folder in cloud storage, organized by month. Deductible: hosting, domains, tools, home office percentage, equipment.

6. Dunning Management (Failed Payment Recovery)

Involuntary churn (failed payments) accounts for 20-40% of all subscription churn. This is pure recoverable revenue.

Retry schedule:

Key principle: downgrade, never delete. Deleting a user's data over a failed payment destroys trust and eliminates any chance of recovery.

Source: Baremetrics — Dunning Management Guide, QuantLedger — Stripe Dunning

7. Budget Allocation

Early stage (pre-revenue to $1K MRR):

Growth stage ($1K+ MRR):

Revisit allocation quarterly. As traction increases, shift from product-heavy to marketing-heavy.

Next Steps

Report to user: "Pricing set: [tiers]. MRR tracking: [status]. Key decision: [one line]"

Suggested next steps (user decides):

• Pricing set → "Run copy-craft for pricing page"
• Payment set up → "Run legal-guard for ToS"
• Budget allocated → "Run growth-track"