I understand Paddle's value saving time/headache in dealing with paying sales tax around the world. But, before I jump in, I'd like to understand if there is other value regarding the Single-Member-LLC accounting and tax.
- First, can you describe what detail Paddle provides in their reverse invoice?
- I assume it is mostly just the bottom line of the payout for that month, without any detail regarding the specific customers who were billed for a subscription, and type (monthly, annual), correct?
- Do you basically just take that number for the month from the Paddle reverse invoice, and enter it into your QuickBooks? So, you'll have 12 entries for the year? You don't try and reconcile each induvial customer and charge with the reverse invoice total, resulting in a QuickBooks entry for each charge, correct?
- Assuming no other sources of revenue for the SMLLC, the sum of the 12 entries taken from the Paddle reverse invoice gets entered into your 1040 Schedule C Line 1 - Gross receipts or sales, correct?
- Cash or Accrual Accounting? The SAAS subscription model seems like it should have to use accrual. But, if Paddle doesn't provide the details of what customers/charges are included, then it seems like a huge pain to reconstruct that. I think the IRS allows companies less than $5million in revenue to use cash, so the point may be mute. (I'd love to have the problem of $5million in revenue, and be able to hire a CPA to work it out).
Thanks for your insights!