[jansho]

These SaaS stories are scaring me a little. Is there a non-BS guide that addresses these “hidden” issues associated with billing, tax etc?

I want to build a website with a paywall, accessible with annual subscription only. Let’s assume around 5,000 users for the first year. I assume that I can put together a WordPress website with a bunch of payment plugins - sign up, add cart, PayPal, debit card etc - would be enough.

But maybe not? What am I missing here.

[aidos]

You need to think about the tax implications which depends on whether you're selling to businesses or individuals and which countries you and they are in, amongst other things. I'm basically banging the Chargebee drum on here because they'll take care of all that for you.

[Silhouette]

Taking the money is (relatively) easy. Plenty of payment processing services will help you with the mechanics of that these days. As many of them enthusiastically demonstrate, the basic charging mechanism often requires just a bit of information to sign up and then a few lines of code (or a simple plugin for WP) to implement. You're probably right about putting that together without too much trouble.

Unfortunately, then you get the other 90% of the job, because you're a business and charging money, and that comes with all sorts of legal, accounting, tax and regulatory obligations that will vary depending on the place(s) you do business and the place(s) you find your customers. This is the stuff the flashy "Take your first payment in five minutes" demos on the homepages of all the payment services don't tell you about, but if you're lucky your accountant might. (If you're less lucky, you might need a more experienced accountant but won't know it, and you might wind up making expensive mistakes. Doing a lot of reading online about the rules that apply in your specific location, for example if your government's tax department offers any guides for new businesses about what they generally need to do, is the only reasonably effective solution I know to this problem.)

In practice, these things almost always come down to

(a) identifying the relevant tax rules based on your location and your customer's

(b) calculating the correct tax on sales, as well as on any payment processing fees, etc.

(c) keeping complete, accurate, systematic records of all transactions

(d) filing the necessary tax returns and/or providing the records to your accountant so they can do the serious business financial paperwork

(e) paying your taxes properly.

None of it is rocket science, it's just that it's often a big, complicated system that you have to work within, and it's full of little details like generating sequential numbering for invoices, or knowing how to handle the tax if you've issued a refund before/after the end of the tax reporting period containing the original sale, or being able to record two non-conflicting pieces of evidence to confirm which country your customer is in. It can be time-consuming and error-prone, and taking enough professional advice to understand your obligations and how to do everything correctly can be a significant expense by start-up standards.

Finally, depending on your market, you may at some (possibly quite early) point want to accept payments through more than one channel: purchase orders and payments to bank accounts, online credit cards, the various direct debit schemes or national card schemes, PayPal, and so on. If you're in that position, the "front line" payment processing services like Stripe or PayPal are unlikely to be sufficient, because it's a level above what they're designed to do. So probably you will either need to use one of the next-layer-up services such as those mentioned elsewhere in today's discussion to co-ordinate things, or you will need to do some substantial programming and database work of your own to do something intelligent about combining the functionality and record-keeping for each service.