Blog / LearningFriday, July 10, 2020

Taxation

Tobias Binau

Taxation

A story from real life.

 

We have success – we internationalize!

But can we do that?

 

SaaS companies arise everywhere and are extremely popular among start-ups. You develop a nice software and then start to sell the access to it.

 

Luckily, there are many examples on SaaS companies that have had success – however, there are also many examples of SaaS companies who have become victims of their own success by having limited themselves in the beginning of the process…

 

In this case, a SaaS company has limited themselves in terms of their ambitions when it comes to expanding internationally – and not only in one way… but in two ways, a subscription system had to come to their rescue.

 

Firstly, taxation… Their systems could only charge a single VAT code… the Danish. Perhaps because you initially expected that you would only sell your software in Denmark…  

 

… Now all of a sudden you had to sell your software in other countries, and then (of course) you can't charge 25% VAT on all invoices. You could of course bill all the customers manually every single month, but it is not very fun when you have 1000, 5000 or 10,000 customers…

 

They got hold of a subscription system, where taxation was of course an integrated element that could be controlled just as you wanted.

 

Now – it’s time… to go beyond the boarders and internalize your company!

Free 14-day trial periods were created.... Now they just had to be converted to paying customers.

 

It is “just” to present the potential customer with a payment window: Enter Mastercard or Visa and we will get started – right?. There just weren't many customers who did.

 

Why?

 

The customer's preferred means of payment was not supported and thus not available. So Klarna, PayPal, iDEAL, SEPA, etc., needed in order to convert these sample users to paying customers.

 

[a classic and pretty frustrating situation as we described further in this blog post - different countries have different preferences for online payment]

 

Fortunately, they were in the situation that they had chosen one of the few subscription systems that are independent of payment service providers and integrate with all of them.

 

Now our SaaS business is converting lots of foreign customers and their journey of growth can continue.

 

Can you guess who they used? 

 

Author: Tobias Binau 

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