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Do you invoice your customers directly, or do you use something like Paddle?
Hey everyone,
In my country at least, it is quite a headache to calculate the local taxes for every country where we sell a product.
So a simple solution would be something like Paddle, where they invoice the client instead of you, they take a commission, and you invoice Paddle at the end of the month.
This is a major problem that I've encountered with entrepreneurs and makers.
We currently use Paddle both for payment processing and it helps us with the invoicing and tax calculations by a lot, even if they have a roughly 6% commission rate.
What do you use? Are there better solutions than Paddle?
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Alex Subi
The choice of a payment processing and invoicing solution depends on various factors, including your specific business needs, the countries you operate in, and your preferences. While Paddle is a popular choice for its ease of use and features, there are several other platforms that you may consider based on your requirements like Calculadora de IVA mexicano. Here are a few alternatives:
Stripe:
Stripe is a widely used payment processor known for its flexibility and developer-friendly API. It supports a variety of payment methods and can handle invoicing and subscription management.
PayPal:
PayPal is a well-established payment platform that is widely recognized and accepted. It provides features for invoicing, subscription management, and supports multiple currencies.
2Checkout (now Verifone):
2Checkout, recently rebranded as Verifone, is another global payment processing solution. It supports various payment methods and provides features for managing subscriptions and handling taxes.
Braintree:
Braintree, owned by PayPal, is known for its simplicity and ease of integration. It supports multiple payment methods and currencies.
Square:
Square is a popular solution for businesses of various sizes. It offers a range of products, including point-of-sale systems, online payment processing, and invoicing.
FastSpring:
FastSpring specializes in digital commerce and offers a full-service e-commerce platform, including payment processing, subscription management, and global tax compliance.
When evaluating alternatives, consider factors such as transaction fees, ease of integration, available features, global reach, and the level of support for tax calculations and compliance. Additionally, make sure to check user reviews and testimonials to gauge the experiences of other businesses using the platform.
It's important to note that the "best" solution depends on your specific business context and requirements, so it might be beneficial to try out a few options to see which one aligns most closely with your needs.
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Just used Apple's App Store services for indie projects; but for clients I've used Stripe for payment processing and their APIs are pretty nice. They also offer tax calculations I believe.
You may want to check that out.
In Hungary, I'm in the same situation. I thought a lot about which one I should use, Paddle or Stripe (I'm about to launch my first paid application).
Paddle is more straightforward from an invoices point of view, but I like Stripe's API / dashboard.
With Stripe, I have to create invoices manually for each user who subscribes, which is not a pain in the ass in the beginning.
Here in Hungary, we have pretty weird tax calculations, so I have a problem with both solutions.
Paddle: If I get more than ~8300 EUR / year from a single customer (so from Paddle), I have to pay +40% tax for anything after that, so Paddle will be pretty bad if I have ~700 MRR+.
Stripe: I can set VAT to 27% (VAT in Hungary) for each invoice for the same ~8300EUR / year total income (this is just a simplified thing to use for the new companies). I will lose some money if the other country has lower VAT prices, but still, it's simpler.
After that ~8300 EUR, I cannot use this system. I have to change to a VAT calculation called MOSS, which is the same as Paddle's (use country specific VAT calculations).
But as the invoices are not from the same person, I do not need to pay that extra 40% tax, but I have to manually calculate the VATs for the MOSS system.
So lots of cons/pros. Still not 100% sure which one to use. 🤷♂️
