What are the accounting or finance pain points that indie hackers face?
As someone who has worked in accounting and finance fields for the past 12 years, I realize I have a complete blind spot issues founders/bootstrappers/indie hackers face when it comes to the numbers.
Trending on Indie Hackers
VAT Moss, VAT Moss, VAT Moss, VAT Moss, VAT Moss, VAT Moss, VAT Moss, VAT Moss, VAT Moss. Oh and VAT Moss.
Then a reliable book keeper to keep everything in shape.
Haha so if I'm gauging this right. You biggest pain point is:
...
CLIFF
...
?
Yes. But did I mention VAT Moss?
Does anyone know whether US-based saas businesses need to worry about VAT if they have EU customers? I’m getting mixed and unclear answers from Google.
You'll need to pay VATMOSS if you're based in the USA if you sell over 10,000 euros in revenue in the EU.
As far as I know there is no threshold for VAT in EU. You’ll have to register and collect taxes from the very first transaction on.
Thanks for the reply Thomas. I've been doing research on all this sales tax stuff for the past couple hours. It's a nightmare.
I believe the thresholds differ by country? https://www.avalara.com/vatlive/en/eu-vat-rules/eu-vat-number-registration/vat-registration-threshold.html
I think EU saas businesses are also on the hook for U.S. state sales tax, but I wonder if they comply?
Paddle is looking really good right now.
How are you handling VAT/U.S. state sales tax at EmailOctopus? I see you're using Stripe, but I can't imagine having to deal with all of this myself. Are you using a tax calc integration like Quaderno and then handling tax registration and payments yourself? Or do you have an accountant/finance person handle it?
Those are VAT thresholds for resident companies, ones who would usually sell physical products. VATMOSS thresholds are different. But I know very confusing.
We handle EU tax in-house, having built the front-end which then applies the correct tax rate in Stripe. But haven't passed any other thresholds/economic nexus besides VATMOSS (as far as I'm aware).
That said, we have grown a fair bit this year so should probably check that. Particularly, as you say USA ones.
Thanks for the info. Looks like EmailOctopus is crushing it! I'm going to give it a try in the near future – I'm tired of Mailchimp.
For us at Hypefury:
World Wide VAT related stuff.
Expenses on dev work vs activating them into assets on the balance sheet.
Choosing what accounting software to use.
All the admin stuff related to paying employees / freelancers.
Interesting! So its a mix of deeper knowledge of tax/accounting (VAT/expense classifications) while also removing work of payroll/accounts payable for contractors. is that right?
Which would be the single biggest relief if solved for Hypefury?
Good question :) the admin stuff would be great.
The vat is not a huge problem atm because we haven’t met a lot of thresholds yet. But that will become a bigger pain when we’re growing.
The issues I've come across:
The interesting part about most of the above is that many first-time founders either don't think about these jobs (they just don't know they are jobs to be done) or over-rely on a bookkeeper to do it for them. In many cases, a small lifestyle business can do just fine just by relying on a bookkeeper. The day they try to grow, sell or raise funds, they face an uphill battle.
I find more experienced entrepreneurs are very much aware of their importance and hire accordingly for the functions they can't do.
As for VAT: that's something a good accountant should take care of for you.
I do bookkeeping myself with Xero. I think I do an OK-ish job in classifying transactions and managed to wrap my head around a chart of accounts, but I'm still not sure everything is set up correctly. A short course (tailored to SaaS/internet companies) would have been helpful.
Oh, and as others have mentioned, international taxation (VAT) is a whole different can of worms. It seems to me most internet companies pretend this problem doesn't exist. Can't blame them (us), it's quite complicated and time-consuming to keep up with it.
Xero is good. I personally use Wave (https://www.waveapps.com/) as I consult and don't need to fully fledged suite that Xero offers but have used it extensively in the past.
Nothing beats learning by doing!
What gaps in your knowledge would you want filled when it comes to accounting/finance for SaaS?
Finding decent help. It's hard to find good bookkeepers and accountants when you only need them a few hours a month, beyond the initial set up.
Yep that is true!
When you say "help", do you mean someone to go through and reconcile your bank accounts and classify all your transactions?
Or do you mean that you just want to bounce things off someone but would only need their time a couple hours a month?