However, many founders quickly discover that the biggest hurdle to global growth isn’t product-market fit — it’s the structural drag of an entirely different set of Western administrative and regulatory requirements.

Companies are often caught off guard by the technical requirements and administrative realities. Moving into the West is not just about switching currencies; it’s a fundamental shift in how you manage your customer lifecycle and your business’s legal footprint.

Every new market demands its own web of legal entities, localized contracts, domestic banking, and tax registrations. That means that a lean, engineering-led startup can quickly become bogged down in legal and finance operations.

Based on FastSpring’s own internal data and our experience helping thousands of sellers scale, here are six proven strategies to navigate the high-stakes transition from APAC into Western markets.

FastSpring is how companies in APAC enter the western market online and in more places around the world. We handle every payment need — from subscription management to tax collection, remittance, and more — so your business can go farther, faster. We’re also the leading merchant of record for global software companies, powering over a billion dollars in worldwide transactions every year. We’ll manage your checkout, VAT and sales taxes, compliance, and more, freeing you to focus on what you do best: building great software. Set up a demo or try it out for yourself.

1. Leverage the Merchant of Record (MoR) Model

Selecting the right financial architecture is the most critical decision an APAC seller can make when selling beyond their home region. For many, the merchant of record (MoR) model provides a shortcut through the bureaucratic hurdles that typically accompany international growth. The MoR serves as the legal entity responsible for every transaction, allowing your team to focus on the product experience while the MoR handles the heavy lifting of global commerce.

• Immediate Market Entry: An MoR eliminates the need for APAC companies to establish local legal entities in the U.S. or Europe, enabling global expansion in days rather than months. Entity setup is not just a one-time cost — it creates ongoing legal, financial, and operational overhead.
• Compliance Outsourcing: The MoR handles the calculation, collection, and remittance of sales taxes and VAT, and it assumes the risk for fraud and chargebacks. And while taxes are very important, this is also critical  for companies using traditional PSPs, because it is just one part of a much bigger operational burden.

2. Meet Digital Goods Regulations in Europe

Europe has moved aggressively to standardize the digital economy, introducing frameworks that require absolute precision in data handling and tax reporting. Navigating these rules requires a proactive approach to ensure your checkout process remains both compliant and conversion-friendly. 

The following recent and ongoing mandates represent a hard line for international sellers, where universal requirements have replaced previous exemptions for smaller companies. 

• VAT in the Digital Age (ViDA): As of Jan. 1, 2025, previous VAT registration thresholds have been eliminated. Every B2C digital sale, no matter how small, is now a taxable event that must be reported through the One Stop Shop (OSS) system.
• The EU Data Act: Starting in September 2025, European customers have a “cancel anytime” right for cloud services, allowing them to terminate contracts with two months’ notice regardless of legacy terms. Providers must also ensure data portability, and by early 2027, all “switching fees” will be prohibited.
• Privacy as a Trust Factor: Beyond legal mandates such as GDPR, 2026 marks a shift toward “Privacy by Design.” Western buyers increasingly treat data transparency as a competitive requirement, so showing clear, auditable trails for data residency and automated decision-making is no longer just a legal hurdle but a primary driver of customer trust.

3. Navigate US Tax and Subscription Enforcement

The United States market is currently defined by complex state and federal regulations. Success in the U.S. requires a keen eye on shifting state legislation and a commitment to clear, accessible user terms that protect your business from regulatory scrutiny. 

Balancing these local tax obligations with federal consumer protection rules is essential for any APAC brand looking to establish a long-term presence.

• The Nexus Maze: Many U.S. states now impose sales tax on digital downloads and SaaS. For example, starting July 1, 2025, Maryland enacted a 3% sales tax specifically on technology services.
• Subscription Transparency: The FTC continues to aggressively enforce subscription transparency under the Restore Online Shoppers’ Confidence Act (ROSCA). Companies must offer simple, accessible cancellation options and clear disclosures about auto-renewal terms or risk significant penalties.
• Data Minimization: In line with the FTC’s focus on consumer protection, Western brands are shifting toward “data minimization”: the practice of only collecting what is strictly necessary. For APAC companies accustomed to data-rich “super-app” models, adopting a lean data approach is essential to avoid the multi-million-dollar settlements that are common under U.S. state privacy laws such as California’s CCPA.

4. Bridge the Gap Between Design and UX

APAC and Western customers often operate on different visual logic. While many high-growth Asian interfaces thrive on information density (such as surfacing multiple options, promotions, and data points all at once to show value), Western users typically favor minimalism and progressive disclosure. In the U.S. and EU, consumers don’t view a cluttered UI as feature-rich; instead, they perceive it as overwhelming and even spammy.

Here are a few tips on how to design for these audiences as you expand your business:

• Design for Focus, Not Completeness: Western SaaS buyers prioritize speed and ease. They expect a clean, minimalist layout with a single, clear call-to-action (CTA). In Western markets, whitespace is a functional tool for guiding the eye; removing it can lead to higher bounce rates.
• The Trust of Transparency: While APAC buyers often build trust through multi-sensory engagement, Western buyers build trust through visual clarity. This includes clear typography, a subdued color palette (moving away from high-energy reds and golds), and a direct, step-by-step onboarding flow that reveals features only as needed.
• Actionable Adjustment: Audit your marketing site and product dashboard for visual noise. Shift from a high-density, all-in-one layout to a streamlined experience that highlights one specific outcome at a time. This reduces the mental effort required for a Western buyer to say “yes” to your product.

5. Optimize Payment Performance and Risk

Cross-border payment performance is a silent variable that can either accelerate your growth or quietly drain your revenue through high decline rates. Friction at the point of purchase is often the result of poorly localized payment methods, or of inadequate fraud management that flags legitimate international buyers. 

For APAC companies, the most significant hurdle is often infrastructure: transitioning from a region where digital wallets and real-time payments are the primary engine of commerce to Western markets that remain deeply rooted in one-click payment systems.

• Local Optimization: Adding local payment methods (such as iDEAL in the Netherlands) can increase checkout conversion rates by up to 30%. Successful brands use dynamic checkouts that automatically detect a user’s location to display relevant currencies and billing frequencies.
• Managing Risk: Fraud and risk are harder to manage internationally. For example, while India’s UPI transactions are generally irreversible, Western credit cards offer robust consumer protections that make disputes easy. Utilizing an MoR can help mitigate this by assuming the legal and financial risk for fraud and chargebacks, protecting your bottom line from the volatility of international payment disputes.

6. Implement Advanced Pricing Strategies

Simply converting your home-market pricing into USD or EUR is rarely a winning strategy. To truly capture the market, APAC brands must adopt sophisticated pricing models that reflect the actual purchasing power and billing expectations of Western customers. These adjustments aren’t just cosmetic — they’re data-backed methods for increasing the lifetime value of every user you acquire.

• Purchasing Power Parity (PPP): Universal pricing often fails. SaaS companies that implement PPP-adjusted pricing — reflecting local economic conditions — see up to 18% higher growth rates and 25% higher revenue per customer.
• Annual vs. Monthly Billing: While monthly retention in Asia often hovers around 75% compared to 85%+ in the West, annual subscription retention is nearly identical globally. Understanding how customers like to buy (e.g., promoting annual plans) can help stabilize revenue and offset higher Western acquisition costs.

Scale Efficiently With FastSpring

Global expansion can get expensive quickly when each new market adds more internal complexity. FastSpring handles the global checkout, tax management, and regulatory compliance so you can focus on building your SaaS or software business rather than managing administrative overhead.

Ready to scale your SaaS beyond borders? Schedule a demo today.

The post 6 Proven Strategies for APAC Companies to Successfully Enter Western Markets appeared first on FastSpring.

When we ask our customers, “Why did you choose a merchant of record (MoR) over a traditional PSP?,” one of the most common responses is the ease of tax compliance — the ability to “set it and forget it.”

But tax is far from a static topic. In fact, it shapes economies and influences global commerce. That’s why we continuously monitor tax regulations worldwide — tracking threshold changes, new legislation, and tax rate adjustments — so that our platform remains compliant and seamlessly supports your business.

One of the key areas of tax compliance we manage is VAT (value-added tax) on sales of digital services. Many countries issue separate guidance to regulate the supply of digital goods and services, when provided by a foreign company. (Sometimes this is referred to as ESS, or electronically supplied services regulations.) And the tax treatment can differ from rules followed by a resident company. It’s important to understand the nuances to remain tax compliant. 

These regulations often broaden the scope of transactions subject to VAT and can include services such as:

• Streaming platforms (e.g., Netflix, Spotify).
• Online advertising (e.g., Google Ads, Facebook Ads).
• Cloud computing services.
• eLearning platforms.
• Software and app subscriptions.

Other requirements can include engaging a local representative to act on your behalf, triggering income tax nexus (in addition to VAT nexus) and may even require you to settle any outstanding balances prior registration. But each country has a unique approach to global tax compliance.

Upcoming Regulations

On January 17, 2025, the Philippines extended its VAT legislation to cover digital services supplied by foreign companies to consumers in the Philippines. They’ve issued several interim deadlines, but the important date is June 1, 2025. Companies should register and be ready to collect 12% VAT at the very latest by June 1, 2025.

We’ll be ready — will you?

Want a Payments Platform That Will Worry About Taxes for You?

You can stay up to date by reading complex tax regulations — or you can partner with FastSpring. As your global commerce partner, we stay ahead of these changes so you can focus on growing your business without tax-related worries. 

For more details on tax compliance with FastSpring, visit our tax documentation or reach out to FastSpring Support.

About FastSpring

FastSpring is how SaaS, software, digital products, and video game companies sell online in more places around the world. We handle every payment need — from subscription management to tax collection, remittance, and more — so your business can go farther, faster. We’re also the leading merchant of record for global software companies, powering over a billion dollars in worldwide transactions every year. We’ll manage your checkout, VAT and sales taxes, compliance, and more, freeing you to focus on what you do best: building great software.

Set up a demo or try it out for yourself.

The post The Nuances of VAT on Digital Services Sold Internationally appeared first on FastSpring.

However, taking advantage of this shift means that you become responsible for everything that comes with selling games in whatever jurisdictions you sell them in — including setting up an online store and displaying products, having a way to accept and process payments, and especially, taxes. 

In this article, we focus on how selling mobile apps and games D2C via web shops can affect your indirect taxes (sales tax and VAT) and what developers need to consider as they start diversifying game monetization.

Whether you want to start big or start small with the D2C model, it’s important for developers and publishers to understand the sales tax and VAT implications of selling D2C via web shops.

Payments Options for Selling Games D2C

When game companies decide to sell D2C, they typically choose between two key service models: using a merchant of record (MOR) model, or by leveraging a payment service provider (PSP). Each model comes with distinct tax responsibilities.

Merchants of Record

A merchant of record is a comprehensive payments and taxes service that becomes the legal entity selling the product. That means the MoR becomes responsible for worrying about the regulatory and sales tax and VAT implications of accepting payments from any of the countries where it sells the product — instead of the software maker or game publisher.

Payment Services Providers

A payment services provider can help businesses sell a product, but it only bridges the gap between the seller and the specialized payments services and networks needed to accept payments, such as payment gateways, payment processors, and a merchant account. 

So a PSP simplifies the process of accepting payments, but that’s usually all it does. A PSP will not worry about international taxes and regulations (some PSPs may have add-on services to help with taxes, but those costs can pile up as the package of services becomes more complex). 

The Tax Implications of Selling D2C With a PSP or MoR

Payment Service Providers and Taxes: Missing Pieces

A PSP facilitates payment processing but leaves most sales tax and VAT related duties to the game publisher.

Here are a few of the tax responsibilities that PSPs won’t take care of:

• Tax Registration: Registering in U.S. states or international countries where the developer has sales tax and VAT nexus.
• Tax Calculation and Collection: Ensuring that sales tax and VAT is calculated, collected, and remitted accurately.
• Liability Management: Bearing full responsibility for sales tax and VAT related issues, including audits.
• Compliance and Audit Costs: Covering the expenses of in-house or outsourced sales tax and VAT compliance services and audit related fees. 
• Invoice Disclosures: Providing correct sales tax and VAT disclosures on invoices.
• E-Invoicing: Issuing e-invoices in countries requiring them.
• Legal Representation: Appointing legal representatives where required.

Merchants of Records and Taxes: Handled for You

An MoR assumes full responsibility of sales tax and VAT compliance because it’s the entity actually selling the product, allowing developers to focus on what matters: game development.

The many benefits of using an MOR include:

• The MoR takes care of all the bulleted points above that a PSP won’t.
• Reduced Legal Exposure: Developers are shielded from direct interactions with tax authorities.
  • For example, when one of our customers faced aggressive sales tax and VAT inquiries, FastSpring’s tax team intervened, providing expert representation and achieving a favorable resolution (read more here). Without the kind of tax support an MoR provides, a regular inquiry could lead to a full audit if these taxes are handled in house.
• Expert Tax Support: A dedicated tax team ensures developers stay compliant and can resolve disputes with sales tax and VAT authorities effectively.

Why Choose FastSpring as Your MOR? 

FastSpring is how gaming publishers sell in more places around the world. For nearly two decades, FastSpring has been a trusted payment provider you can use to sell games or in-game items on your website, web shop, or embedded directly into your game with fully customizable and branded checkouts just for you. 

To further invest in our commitment to supporting game developers, FastSpring hired Chip Thurston as our Head of Gaming. Read the press release here. 

FastSpring allows you to offload the complexity of global payments, sales tax and VAT compliance, player payments support, and many other aspects of payments management. Choose A Partner You Can Trust With Your Players™ and spend less time managing your payments and compliance and more time making great games! To learn more about how FastSpring supports game developers, visit fastspring.gg.

Ready to get started? Set up a demo or try it out for yourself.

The post The Tax Implications of Selling Games D2C via Your Own Web Shop appeared first on FastSpring.

• Recurring invoicing.
• Payment processing.
• Remitting taxes. 
• Payment reconciliation.
• Payment reminders.
• Subscription management.
• Reporting.
• Expense tracking.
• Payroll.
• And more …

However, it’s almost impossible to find one accounting software solution that satisfies all your needs as a SaaS company. Even software that advertises SaaS-specific features is rarely a complete solution. 

For example, many accounting software offer a way to collect payments, however, it’s typically only for United States payments, not international payments. If you want to collect international payments, you’ll likely need an additional payment solution that specializes in global payment processing. 

That’s why most SaaS companies end up layering multiple point solutions on top of generic accounting software to build the solution they need.

In this guide, we compare seven accounting software options by covering what each one can and can’t do. In particular, we start with an in-depth look into the solutions our platform, FastSpring, provides and how we take on transaction and sales tax liability for you. 

Table of Contents

• FastSpring
• Maxio
• Oracle NetSuite
• Quickbooks Online
• Freshbooks
• Stripe
• Xero

FastSpring is an end-to-end payment solution for companies selling digital products and software-as-a-service. We help you gather and remit indirect tax (e.g., sales tax, VAT, GST), balance monthly transactions, send recurring invoices and collect payments, and much more. To see how we can help you quickly expand globally, sign up for a free account or request a demo today. 

FastSpring: Sales Tax, Transaction Reconciliation, Payment Processing, and More for Software Companies

FastSpring provides solutions for:

• Gathering and remitting U.S. sales tax and international VAT and GST.
• Global payment processing.
• Sending invoices and payment reminders.
• Reconciling transactions with fulfillment.
• Reporting.
• Much more …

But FastSpring does more than just provide software for a few aspects of accounting — we’re Merchant of Record (MoR) for SaaS companies. 

As your MoR, we handle all of these tasks for you. Plus, we take on transaction liability and the responsibility of calculating, gathering, and remitting sales tax, VAT, and GST.

In the following sections, we dig deeper into how FastSpring helps SaaS companies expand globally while simplifying accounting tasks. 

Note: You will need additional accounting software for payroll, income tax, internal balance sheets, etc. FastSpring easily integrates with other solutions (e.g., QuickBooks) via extensions, webhooks, and an API. 

“One of the key factors [for switching to FastSpring] was the fact that FastSpring was easing our administrative burden regarding global tax and VAT management, and the number of invoices that we needed to register.” 
– Ovi Negrean, Co-founder and Chief Executive Officer

Fully Managed Sales Tax, VAT, and GST

SaaS companies didn’t always have to pay sales tax, VAT, and GST, however, that’s no longer the case. More and more countries are passing laws that require non-resident SaaS companies to gather and remit some form of indirect tax. If you don’t, you may face heavy fines and/or be banned from transacting in that jurisdiction. 

Most accounting software will help you add sales tax (assuming you’ve configured the options and settings correctly) to invoices and generate reports for remitting sales tax. However, accounting software is typically inadequate for:

• Calculating and collecting VAT or GST. If you want to transact outside of the U.S., you’ll be completely on your own to calculate and remit VAT, GST, and other forms of indirect tax. (As we discuss in this article on SaaS tax software, even most tax software is inadequate for collecting international indirect tax.)
• Adding sales tax to purchases on your website. Some accounting software will offer a payment portal where customers can settle invoices. However, this is entirely separate from any checkout you may have on your website, which means you’ll need different software for collecting indirect tax on your website (which means extra cost and extra work).

Plus, you’re ultimately held responsible for all tax liability. Maintaining tax compliance is often more complicated than simply collecting and remitting the correct amount (and type) of indirect tax at the right times. 

For example:

• Countries such as Serbia, the United Kingdom, Taiwan, and others require electronic invoicing (from resident and non-resident companies alike), which can cost companies $2k-$5k per year. Note: E-invoicing mandates are increasing at an alarming rate — the EU is rolling out universal electronic invoicing requirements by 2028.
• Countries such as India, Indonesia, Japan, and others require your account to be “pre-funded” meaning you have to predict the amount of tax you will owe and keep that money in your account until it’s time to remit the funds (often up to three months in advance).
• Countries such as Colombia, Japan, Mexico, Serbia, and others require local representation. This means someone with a physical presence (usually a lawyer or accountant) in that country has to be responsible for your tax liability, which can cost anywhere from $5k to $15k per year.
• Countries such as Taiwan, Indonesia, Nigeria, Vietnam, and others require you to file an income or profits tax return once you start collecting indirect tax, which can add up to $5-$10k per year. 

That’s why most SaaS companies end up hiring full-time tax accountants and specialists to handle indirect tax. 

FastSpring simplifies the entire process and makes it really easy to add all forms of indirect tax to invoices (and collect it at checkout) by handling it for you.

With over 20 years of experience filing 1,200+ tax returns each year in 100+ jurisdictions, our team ensures the correct amount (and type) of indirect tax is collected (we even handle tax-exempt transactions in the U.S. and B2B reverse charges when applicable). 

Then, our team remits those taxes for you and ensures all the necessary procedures are in place to stay compliant. We have long-standing relationships with tax specialists globally to stay current on regulation changes, enforcement updates (sometimes specific industries are targeted), and trends they are seeing with other software companies.

If a country or state approaches you about tax compliance, our team will often provide you with copy-and-paste responses. 

Quote Management and Recurring Invoicing

With most accounting software, you can easily manage B2B subscriptions on your website, but not B2C transactions — which is why many companies end up with two different solutions. That means double the cost and double the work. 

With FastSpring, you can manage B2B and B2C transactions from one platform.

FastSpring provides several options for setting up different subscription models such as: 

• Fixed, per seat, metered, tiered, and bundled billing.
• Prorated billing to accommodate upgrades and downgrades mid-cycle.
• Automatic or manual renewal.
• Upsells, cross-sells, one-time fees, discounts, and gifts.
• And much more …

Then, you can make these products available on your website:

Alternatively, you can add the products to quotes and invoices using FastSpring’s Digital Invoicing tool. With Digital Invoicing, your team can create and manage quotes and invoices (e.g., add discounts and tags, set the expiration date, leave notes for the customer, track the purchase process). 

You can also offer a self-serve portal where customers can generate their own quotes or invoices based on items in their cart. 

International Payment Processing

Most accounting software will offer simple payment processing for transactions in the U.S., however, most only support a few payment types (e.g., Mastercard, Visa, ACH) and hardly any of them provide payment processing for international payment methods or currencies. To accept international payments, you’d need to integrate with and manage additional payment processors. 

FastSpring makes it really easy to accept tons of preferred payment methods around the world (via checkout or invoice) by:

• Managing multiple payment gateways for you. Each payment gateway has specific countries, payment methods, and currencies that they support. For example, a payment processor may support Amazon Pay in the United States but they won’t process payments from Brazil. With FastSpring, you’ll automatically have access to multiple payment gateways that specialize in international transactions (and transactions in the United States).
• Providing currency conversions at checkout and on invoices. You can set the price for each product in each currency or let FastSpring make the conversions for you. You can also let your customers choose their preferred currency (and language) or let FastSpring choose the appropriate one based on their location. 

“Having many payment methods that are always relevant to each different region around the world has helped us achieve significant growth worldwide.”

– Ovi Negrean, Co-founder and Chief Executive Officer

To pay an invoice, customers simply click on the ‘Pay Now’ button at the bottom of the invoice (as shown below). 

This will take customers to either a popup checkout or a web storefront hosted by FastSpring, depending on what you choose. Either one is very customizable in terms of the look and feel of the checkout. 

Note: You can use this same checkout on your website, and you’ll have the option to embed the checkout on your webpage, if you prefer. Plus, you can use FastSpring’s Store Builder Library to customize the buyer journey leading up to checkout (e.g., cross-sells, upsells).

Finally, you can configure FastSpring to send out payment reminders two, five, seven, fourteen, and twenty-one days after a payment method fails. In our experience, sending out multiple payment reminders is the best way to ensure ongoing payment.  

Simplified Transaction and Fulfillment Reconciliation

Most accounting software will help you automate the process of making sure the payments you receive match the orders being filled. Even though it’s automated, it can be a huge task to verify that the automation worked correctly and to fix any imbalances. 

Plus, international transactions make it more complicated because you may have payments coming in through different gateways (and therefore different software providers) and into multiple merchant accounts. 

As MoR, FastSpring simplifies transaction reconciliation by handling it for you. We take all of the transactions with your clients and bundle them into one or two lump sum payments which we send to you once or twice per month. 

Instead of spending hours balancing hundreds or thousands of transactions each month, you spend just a few minutes balancing one or two transactions from FastSpring. 

You still have full control over your product (i.e., how it’s bundled, the pricing model, how much is sold, where you want to sell it, fulfillment, etc.).

Detailed Reporting for SaaS KPIs

FastSpring offers a built-in reporting feature to help you find the information you need to create common accounting reports (e.g., breakeven report or balance sheet). Most reports can be found in the Revenue Overview dashboard or the Subscription Overview dashboard, but you can also create and save custom reports. 

If you don’t see the exact report you need, you can reach out to our team and we’ll help you find (or build) the necessary reports.

Any report can be viewed in your dashboard or downloaded as a CSV, PNG, or XLSX file. You can also integrate our Analytics and Reporting feature with third-party software to pull in or send out data. 

Simple Flat-Rate Pricing

All aspects of FastSpring are available for one flat-rate price based on the volume of transactions you move through our platform. And, there are no upfront charges — you’ll only be charged when a transaction takes place. 

“We were focused on not only finding an ecommerce platform that worked but also on building a relationship and partnership, which I believe is very important. You don’t want to buy something and then be alone. You need a good partnership. In the end, we picked FastSpring because they showed us they wanted to be a true partner.” 

– Frederic Linfjärd, Digital Commercial Manager at Capture One

FastSpring is more than just software for some aspects of accounting — we’re your Merchant of Record. To see how we can help you quickly expand globally, sign up for a free account or request a demo today. 

Build Your Own SaaS Accounting Solution

In addition to FastSpring, you’ll need software to manage things like payroll and income tax. Next, we’ll cover six more options that provide solutions for those areas.

6 Other Accounting Software

1. Maxio (Formerly SaaSOptics)

SaaSOptics is one of the most well-known tools for tracking SaaS metrics (e.g., monthly recurring revenue), SaaS revenue recognition, and SaaS expense tracking. They recently merged with Chargify (a subscription management platform) to form Maxio.

While Maxio has a lot to offer SaaS companies, they don’t take on transaction or indirect tax liability for you. Plus, you’ll need additional software for things like accepting preferred payment methods around the world. (They do work with Avatax to help you collect sales tax and VAT, but the functionality is limited). 

Maxio offers solutions for: 

• Recurring billing.
• Revenue management.
• Expense amortization.
• Integrating with payment gateways.
• Analytics, reporting, and forecasting.

2. Oracle NetSuite

Oracle NetSuite is a business management suite that offers solutions for accounting, B2B and B2C ecommerce, ERP, CRM, and much more. They serve many different industries including software companies. They also support all sizes of businesses from SaaS startups to enterprises. 

Note: NetSuite provides single-seat access to streamline communication between your company and your CPA.

NetSuite includes solutions for: 

• Financial reporting.
• Revenue recognition.
• Automated general ledger spreadsheets.
• Tax reporting.
• Revenue management.
• Project planning and budgeting.

3. QuickBooks

QuickBooks by Intuit is a popular accounting solution for small to midsize businesses and startups. They offer an on-premise and a cloud-based version (called Quickbooks Online). 

QuickBooks wasn’t specifically designed for SaaS companies. Instead, QuickBooks recommends SaaS companies integrate with SaaSOptics to get the metrics and functionalities they need.

QuickBooks offers:

• Payroll management tools.
• Accounts receivable and payable tools.
• Time tracking tools.
• Tools for maximizing tax deductions.
• Virtual bookkeepers that will help you with simple accounting tasks.
• Payment processing online or in person for some debit and credit cards, ACH, Apple Pay, PayPal and Venmo.
• Real-time business reports (e.g., profit and loss statements, cash flow statements)

4. FreshBooks

FreshBooks offers accounting tools to freelancers and companies with multiple employees or contractors. They serve multiple industries including technology, construction, accounting and more. They charge you based on how many billing clients you have that month starting with five billing clients up to unlimited clients. 

Freshbooks offers: 

• Payment processing for MasterCard, Visa, Apple Pay, Discover and ACH.
• Project estimations and management.
• Mileage and time tracking.
• Payroll.
• Bookkeeping.
• Invoicing.
• Reporting.

5. Stripe

Stripe is a payment processor that can be integrated with your accounting software solutions to help you accept and manage payments. Although their platform focuses on getting customer payments into your bank account, they do offer a few accounting-related services such as revenue recognition. 

Stripe serves many different industries, including SaaS, at many different stages of growth, including early-stage startups. However, in this article on Stripe alternatives, we discuss why Stripe may not be the best choice for SaaS companies. In short, companies that choose Stripe as their payment platform often end up with a large software stack to manage. 

Stripe provides solutions for: 

• Your website checkout.
• Gathering sales tax at checkout.
• Fraud and risk management.
• Recurring invoicing and subscriptions.
• Data warehouse management. 
• In-person payments.

6. Xero

Xero is an accounting system for small businesses, accountants, and bookkeepers. Xero is another software that doesn’t directly serve SaaS businesses, and instead offers an integration with SaaSOptics. 

Xero’s features include:

• Accounts payable and cash flow automation.
• Spend management and reimbursements.
• Multiple bank account integrations.
• Online invoicing and payments.
• Payroll.
• Project management.

FastSpring handles international indirect tax, payment processing, digital invoicing, subscription management, dunning, and much more for you. Sign up for a free account or request a demo today.

The post 7 Best SaaS Accounting Software Solutions: In-Depth Guide appeared first on FastSpring.

• Whether or not you’re required to collect and remit indirect tax (SaaS companies didn’t always have to remit indirect taxes, however, many countries now have new tax laws that target non-resident software companies).
• How much indirect tax you should be collecting and remitting (figuring this out is rarely cut and dry — it typically has to be done by a tax specialist).
• How you will collect the right amount and type of tax at checkout (there is software to help you collect sales tax (assuming you know how to properly configure to optimize and comply with the more than 10,000+ taxing authorities in the US), however, most software is inadequate for collecting VAT, GST, and other forms of consumption tax.
• Whether or not there are additional requirements for staying compliant (e.g., some countries require you to file income tax in addition to indirect tax).
• How you will remit those taxes (this is rarely as simple as filling out a form and cutting a check; many countries have additional requirements such as having a representative located in that country handle your tax liability) …

… for every state, province, and country you do business in. 

That’s why most businesses turn to tax software and/or tax consultants to help them manage indirect tax. 

In this guide, we talk about the areas of collecting and remitting indirect tax that tax software and tax consultants can and can’t help you with. Then, we’ll show how our solution, FastSpring, handles all aspects of collecting and remitting indirect tax for you. 

Table of Contents

• What Tax Software Can Help You With
• Disadvantages of Tax Software
• What Tax Consultants Can Help You With
• Disadvantages of Tax Consultants
• FastSpring: Tax Software + Tax Consultants + More
• Conclusion
• Frequently Asked Questions

FastSpring is more than tax software or a tax consultant, we’re the Merchant of Record for companies selling digital goods and software-as-a-service. Request a demo or sign up for a free account to see how FastSpring can help you expand globally almost overnight without adding headcount. 

Note: The information contained in this article is not to be taken as tax advice. 

What Tax Software Can Help You With

Most tax software solutions provide tools for:

• Automatically calculating tax rates for each product at checkout.
• Filling out forms to remit indirect tax.  
• Registering your business in each tax jurisdiction. 
• Knowing when you’ve reached the liability threshold for specific locations and therefore have to start collecting and remitting taxes.
• And more …

Disadvantages of Tax Software

Disadvantage #1: You Have to Manually Assign Tax Codes and Configure Your Checkout

To understand the first shortcoming of tax software, we need to take a closer look at how to use tax software to calculate tax rates.

The amount of tax that needs to be gathered at checkout is determined by a number of factors: 

• The type of product you’re selling 
• The type of customer
• How much revenue you’ve earned from customers in a given location
• If products are bundled together
• Where your business has nexus
• And many more

If even one of these factors changes, it can affect how much tax you have to collect and remit. For example, software sold as a subscription and hosted on a cloud-based server may be taxed differently than software sold as a subscription but hosted on the seller’s private, physical servers. 

Tax software takes the most common combinations of these factors and labels them with a tax code (most tax software will provide hundreds of different codes). To use the software, you find the matching tax code for each of your products and configure your checkout to use the appropriate tax code for each item in the cart. Then, the tax software automatically calculates the appropriate tax rate (based on the tax code you assigned and additional information gathered at checkout such as the buyer’s location) and adds it to the customer-facing pricing. 

It can be extremely complicated to choose the right tax code.

For example, let’s say your company sells digital blueprints for building a DIY deck. With the blueprints, you also include a PDF with recommended designs for landscaping around the deck. Your tax software gives you two different tax codes that seem to fit:

• A0002: For designs and plans sent to the customer via electronic means only. 
• A3001: For blueprints sent to the customer via electronic means only. 

Should you use tax code A0002 because both the blueprints and the landscaping designs could fall under ‘designs and plans’? Or do you use a combination of both tax codes? Or do you use the A3001 code for the blueprints and offer the landscaping design plans as a free bonus? Or something else altogether?

Most companies find they need a tax specialist to handle assigning the right tax code to each product.

Then, you still have to do the manual work of setting up your checkout to use the appropriate tax code for each item in the cart (which typically takes hours of setup and ongoing maintenance).

Disadvantage #2: You’re Held Liable 

A common misunderstanding is that tax software providers are responsible for ensuring the correct amount of indirect tax is collected at checkout. However, that is not the case. Most tax software includes a line similar to the following:

“While we try to make these tools as accurate as possible, please remember that you are responsible for determining the appropriate tax codes.” – Avalara

Which essentially means that if the wrong amount of tax is collected for any reason, you’re held responsible.

Even if the tax software fails to calculate the right amount of tax or they experience a glitch in their system and stop collecting tax altogether in a specific region, the tax software does not have to cover the funds for those taxes — instead, it will likely come out of your pocket. 

(The same is true if you accidentally assign the wrong tax code or your checkout is configured incorrectly and not collecting the right amount of tax.)

Additionally, if you get audited, you’ll be on your own. Some tax software companies will provide on-demand reports and help docs to help you get through audits, but it’s ultimately up to you to come up with a response.

Finally, if you have questions about how to optimize tax rates, qualify for reduced tax rates, or any other tax-related question, you’ll likely be told to consult your tax advisor or read through the help articles. 

Disadvantage #3: Most Tax Software Is Inadequate for Collecting VAT, GST, and Other Foreign Consumption Tax 

While there are good solutions for calculating sales tax rates in the United States, most are insufficient for collecting indirect tax for transactions outside of the U.S. Many SaaS companies run into situations where their tax software is calculating the wrong amount of VAT or GST, can’t calculate tax rates for countries they want to do business in, or doesn’t provide the necessary tax code for their product in all countries. Because of this, most SaaS companies end up calculating indirect tax outside of the U.S. on their own. 

Disadvantage #4: You’re Limited to the Tax Codes They Provide

Tax software typically provides hundreds of tax codes that cover different variations of products and services, so most companies can find a tax code that matches their product. However, if you have a product or service that isn’t covered by a tax code, you’ll be on your own to collect the applicable tax. 

What Tax Consultants Can Help You With

Tax consultants can help you: 

• Stay up-to-date on the tax laws of each jurisdiction you do business in.
• Provide recommendations about when it’s time to start remitting tax in a specific jurisdiction and how to implement measures for compliance.
• Remit indirect tax at the appropriate time. (Keep in mind: Not all tax consultants will offer this service, so you may also need to hire an accountant.) 

Note: Some tax consultants specialize in sales tax compliance in the U.S. or tax on tangible personal property and don’t necessarily specialize in tax laws for digital products or international transactions. So, you’ll want to choose your tax consultant carefully — many SaaS companies need multiple tax consultants to cover all their bases.

Disadvantages of Tax Consultants

Tax consultants can help you stay up-to-date on laws and regulations, but you have to decide what to do with that information. Very few tax consultants will give you straightforward advice on how to handle specific situations. Instead, they’ll most likely inform you of the laws and how other companies have handled various situations in the past. If they do offer advice, it’s often very conservative. 

For example, let’s say a country you’re transacting in passed a new law requiring consumption tax on some digital goods sales. Their guidelines aren’t very clear so you don’t know if your product qualifies or not. A tax consultant will likely advise you to go ahead and file taxes even if there’s a good chance that your product won’t qualify once the guidelines are clarified. If you do decide to file and later find out that you didn’t need to, the tax you already paid is gone and won’t be refunded. 

Some companies would rather take the risk and not file in this situation, however, very few tax consultants will recommend that course of action. Either way, it’s entirely up to you to decide what to do with the information your tax consultant provides, and you’ll be the one held liable. 

FastSpring: Let Us Handle Sales Tax, VAT, and GST Liability for You

The challenges mentioned above with tax software and consultants are one of the reasons we created our solution, FastSpring.

FastSpring combines the benefits of tax software and tax consultants and overcomes the disadvantages of both by acting as your Merchant of Record (MoR), which means we fully take care of sales, VAT, and GST taxes for you.

Specifically, as MoR we:

• Take on tax liability
• Help you assign tax codes
• Calculate tax rates
• Collect and remit sales tax, VAT, and GST
• Take the lead on audits
• And much more …

You control your product, the checkout experience, and branding. We simply provide you with a complete payment solution and take care of sales tax, VAT, and GST for you.

“The decision to move to FastSpring was a complex one, but one of the key factors was the fact that FastSpring was easing our administrative burden regarding global tax and VAT management, and the number of invoices that we needed to register.” 

— Ovi Negrean, Co-Founder and CEO at SocialBee

Click here to read the SocialBee case study.

In the following sections, we dig into what it looks like to have FastSpring as your MoR. 

Get the Right Tax Codes for Every Product

Our team of tax professionals assigns tax codes to all your products so your team doesn’t have to. Just tell us about your product and we take care of the rest. 

As we mentioned earlier, most tax software has a limited number of tax codes. If one of your products or services doesn’t fit into one of those tax code descriptions, you’ll be on your own to calculate the appropriate tax rate. 

FastSpring solves this problem by offering custom tax codes. We can create a unique tax code for any product or service in just a few minutes.

Calculate and Collect Tax at Checkout With Minimal Setup

Our team ensures the correct amount (and type) of indirect tax is being collected at checkout — we even handle tax-exempt transactions in the U.S. and B2B reverse charges when allowed internationally. 

Although we calculate and collect indirect taxes for you, you’ll have full control over the look and feel of your checkout. Here’s a brief overview of the options you’ll have for your checkout: 

• Three options for setup: You can have your checkout popup over your website or embedded into your website. You can also redirect customers to a web storefront hosted by FastSpring.
• Visual customization options: You can change the look and feel of your checkout with CSS overrides and custom brand tools.
• Customize the buyer’s journey. FastSpring’s JavaScript Store Builder Library lets you add FastSpring elements (e.g., buttons) to steps leading up to checkout. This lets you manage upsells, cross-sells, and more.
• Localization: FastSpring automatically converts prices to the local currency and translates text to the local language based on the buyer’s location (you can also let the buyer choose their preferred language/currency). 
• Dozens of preferred payment methods around the world. FastSpring partners with payment gateways that specialize in global transactions so you can offer dozens of payment methods (and ensure high authorization rates). 

“At DaisyDisk, we’re obsessed with the user experience. We chose FastSpring because it provides an easy, localized purchasing experience for every customer, everywhere. FastSpring handles all the details — we don’t even have to think about it.” 

— Oleg Krupnov, Founder and CEO at DaisyDisk

Click here to read the DaisyDisk case study.

Ensure Full Tax Compliance in Every Jurisdiction You Do Business In

Our team remits indirect taxes for you and ensures all the necessary procedures are in place for full compliance. 

With over 20 years of experience filing 1,200+ tax returns each year, we know what it takes to stay compliant across the globe.

If you want to expand into a new territory, just reach out to us and we’ll start the process for maintaining compliance in that region. 

“Thanks to FastSpring, we entered the international market and are successfully receiving payments from customers from all over the world.” 

— Paul Mit, Co-Founder and Chief Growth Officer, FlowMapp

Click here to read the FlowMapp case study.

Note: Some countries have been sanctioned by the United States Government, meaning all transactions within that country are prohibited. FastSpring adheres to these laws. 

Backed by Tax Specialists Around the World

Not only do we have a dedicated in-house team with over ten years of experience, but we also build and maintain relationships with tax specialists across the world. This ensures we are aware of laws and regulations as they change.

In the case of audits, our team takes the lead. If a country or state approaches you about tax compliance, our team will often provide copy-and-paste responses. 

Handle Indirect Tax and Your Entire Payment Platform for One Flat-Rate Fee

FastSpring provides solutions for the entire payment lifecycle, including: 

• Global payment processing
• Subscription management
• Checkout
• Digital invoicing (for B2B transactions)
• Reporting and analytics
• And much more …

All FastSpring solutions are offered for one flat-rate fee based on the volume of transactions you move through our platform. There are no hidden fees and you won’t be charged until a transaction takes place.   

Request a demo or sign up for a free account to learn more. 

“We were focused on not only finding an ecommerce platform that worked but also on building a relationship and partnership, which I believe is very important. You don’t want to buy something and then be alone. You need a good partnership. In the end, we picked FastSpring because they showed us they wanted to be a true partner.” 

— Frederic Linfjärd, Digital Commercial Manager at Capture One

Click here to read the Capture One case study.

Conclusion: Tax Software vs. Tax Consultants vs. FastSpring

FastSpring is the only solution in this guide that takes on indirect tax liability for you. Plus, we automate the entire process of calculating, collecting, and remitting indirect tax. 

Tax software and tax consultants can be useful if you’re set on handling indirect taxes yourself, but be prepared to dedicate an enormous amount of time and resources to the task. 

If you think FastSpring is the right tax solution for your SaaS business, request a demo or sign up for a free account.  

Frequently Asked Questions

What Are SaaS Tax Requirements by State? 

While there are some generalizations that can be made, each state will have its own tax rules for how they tax SaaS products — and those sales tax laws are constantly changing. Furthermore, each zip code within each state may be taxed differently (resulting in 12,000+ taxing jurisdictions throughout the U.S.). 

Here’s a brief overview of sales tax obligations by state (at the time of writing). 

SaaS is taxable in Alaska, Arizona, Hawaii, Kentucky, Louisiana, Massachusetts, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Washington, and West Virginia.

SaaS is non-taxable in Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Hampshire, North Carolina, North Dakota, Oklahoma, Oregon, Vermont, Virginia, Wisconsin, and Wyoming.

Some SaaS may be taxable (depending on if it’s for business use or personal use) in Connecticut, Iowa, Maryland, and Ohio. 

SaaS is partially taxable in Texas. 

Is SaaS Taxable Internationally?

Yes. Although not every country taxes sales of digital goods, more and more countries are passing laws targeting nonresident software companies in order to level the playing field for local companies (who are at a disadvantage if their overseas competitors are not required to collect tax).

What’s the Risk of Ignoring Sales Tax, VAT, and GST? 

The risk of ignoring sales tax, VAT, and GST will be different for company and jurisdiction. However, here are a few things to consider: 

1. You could end up owing huge fines and penalties. 
2. You could be banned from transacting in that state, country, or province. 
3. You could end up paying years worth of indirect taxes. (If you collect indirect taxes in the right amount, you won’t have to pay anything. On the other hand, if you aren’t collecting indirect taxes, those taxes will come out of your pocket.)
4. It could affect the valuation of your company. (We’ve seen million dollar price adjustments because a small software company was noncompliant with indirect tax laws.)
5. Your company could be added to a public blacklist to encourage people not to do business with you.

Learn more: Can SaaS Companies Afford to Ignore Sales Taxes and VAT? – FastSpring

What Is “Nexus”?

Nexus thresholds are what determine whether or not you have to charge sales tax in a given state. Historically, a company had to have a physical presence in a state (i.e., an office building or remote employees) in order to fall under that state’s sales tax jurisdiction. 

However, the United States Supreme Court’s ruling on South Dakota vs. Wayfair in 2018 changed that. Now, each state can consider revenue earned when determining nexus. For many states, the economic nexus threshold is $100,000. If you earn over $100,000 in revenue from transactions in that state, you’ll be required to collect and remit sales tax — even if you don’t have a physical presence in that state. 

What’s in the Future for Indirect Tax Requirements for SaaS? 

More and more countries that didn’t tax sales of digital goods are passing new laws that target nonresident SaaS companies. And, many countries are finding ways to enforce their tax laws more strictly.

Additionally, the EU is rolling out electronic invoicing requirements in 2028 (many countries already have this requirement in place for business with legal entities in that country). This will require all businesses — resident and non-resident — to submit electronic invoices in real-time for every transaction. Not only will this help them enforce compliance with VAT laws, but many countries will likely follow suit. 

The post A Complete Guide to SaaS Tax Software: Options, FAQs, and More appeared first on FastSpring.

The country recently published guidance requiring providers of electronic services — select digital products and services — to register for VAT if they meet certain criteria and thresholds. 

In the below article, we’ll walk you through everything you need to know about Thailand’s new VAT requirements for sales of digital products and services.

• Foreign e-services provider requirements
• What are Thailand’s VAT rates for E-Services?
• Do I need to register for VAT in Thailand?
• How to register for VAT in Thailand
• List of possible VAT penalties

New requirements for foreign providers of e-services

On September 1, 2021, Thailand extended its VAT legislation to cover the supply of digital products and services (e-services) provided by non-resident businesses to Thai consumers. Previously, this type of business was not required to register for VAT.

To track compliance with this new regime, Thailand’s Revenue Department is maintaining a public list of non-resident digital businesses that register for VAT.

Thailand recently published a guide that provides information on a host of compliance-related topics such as VAT filing and payment, validation of VAT numbers, and the use of foreign exchange (FX) sources.

There are a few terms included in the guide that is worth defining:

• E-services: Includes non-physical products delivered over the internet or any other electronic network in an automated way that’s impossible to ensure in the absence of IT (i.e. online games, web and mobile applications, software).
• Electronic Platform: Any market, channel, or other procedure that digital service providers use to deliver services to consumers. These platforms are intermediaries between service providers and service recipients and facilitate service transactions.
• Simplified VAT System for E-Service (SVE): The electronic system that Thailand’s Revenue Department offers service providers and electronic platforms to register for VAT, file VAT returns, pay VAT, and request for VAT refund electronically.

You can read more about Thailand’s VAT on Electronic Services in the official guide.

What are Thailand’s VAT rates for E-Services?

Thailand’s VAT system is very similar to the European Union’s system, which requires recalculation and payments to the tax authorities at each transaction point in the sales chain.

To calculate your VAT amount, multiply the service value in Thai Baht by the 7% VAT rate.

Learn more on Thailand’s VAT for Electronic Service (VES) via the official Thailand Revenue Department website.

Do I need to register for VAT in Thailand?

If you provide electronic services to a non-VAT registered person, such as a consumer or small unregistered business, you will be required to register for VAT if the taxable services exceed 1.8 million Thai Baht (approximately $55,800 USD) within a calendar year.

Non-resident businesses should register for VAT in Thailand if they meet these criteria:

1. Provide e-services, receive payments, and deliver e-services through an electronic platform from abroad.
2. The e-service is used in Thailand by a non-VAT registered customer
3. Income from the e-service surpasses 1.8 million baht in a calendar year or accounting period.

Refer to the Key Elements section of the guide for more details.

How to register for VAT in Thailand

FastSpring sellers don’t need to worry about registering for VAT or calculating, collecting, or filing taxes in Thailand because we handle it on their behalf.

If you’re not using FastSpring for tax management, we suggest you review the guidance issued by Thailand’s Revenue Department. Here’s some information to point you in the right direction:

• Foreign e-service providers and electronic platforms can register for VAT electronically via the SVE on the Revenue Department’s website.
• VAT registration forms should be submitted separately by each entity. If your business has multiple branches or subsidiaries, each entity that meets the requirements for VAT registration should register separately through SVE.

For more information on VAT registration, read the official VAT for Electronic Services (VES) Registration Guide.

List of possible VAT penalties

Here’s a list of possible penalties your business can face for failing to comply with VAT requirements in Thailand.

Civil Penalties

Criminal Penalties

Let FastSpring take on your tax liability

Businesses that sell software and digital products can avoid the hassle of managing global tax obligations by signing up with FastSpring. Our intuitive platform handles all of the complexities required to sell products globally on your behalf, so you can focus on building great products and growing your business.

Our tax experts work around the clock to stay up to date on changing tax laws and partner with outside specialists to ensure your business is protected and compliant.

There’s a reason why over 3,500 businesses trust our global tax solution:

• Offloads your tax liabilities
• Automates tax calculation at checkout
• Collects and remits global taxes on your behalf
• Manages the complete VAT compliance process
• Supports tax-exemption on orders

We’re constantly optimizing our tax engine to stay up to date on the latest regulations. Let us take on your tax management needs — sign up for free today!

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