1. How Not to Take
Money!
A Cautionary Tale!

2. Warning… warning!!!
Disclaimer!!!

3. Warning… warning!!!
Disclaimer!!!
I AM NOT AN ACCOUNTANT! Nor
am I a lawyer. Nor a financial advisor.
Nor do I work in any field which would
make me qualified to advise you. I can
only warn you as a fellow developer -
these things are not simple.

4. About Me:
Engineering Manager at DigitalOcean in
charge of our Support Engineering
Team… we own “billing.”

5. Get formal, professional advice!
❖ You know… pay them to take care of you. You will
thank me.

6. Our Controller:
Barrett Heacock - an all around good
guy. Keeps me in line…

7. Our Controller:
Barrett Heacock - an all around good
guy. Keeps me in line…
RELIES ON CONSULTANTS!

8. Our CFO:
Brian Cohen - Really, really wants you
(and us) to get this right!

9. What makes this SCARY?

10. What makes this SCARY!
❖ Google this subject, e.g. “billing terminology” - all you
find is “medical billing terminology.”

11. What makes this SCARY!
❖ … and if you get this wrong it is really easy to estrange
the most important people in your (business’s) life:
Your paying customers!!

12. What we want:
❖ Step 1: ???
❖ Step 2: ???
❖ Step 3: ???

13. What we want:
❖ Step 1: A Great Idea - e.g. our startup or business.
❖ Step 2: ???
❖ Step 3: ???

14. What we want:
❖ Step 1: A Great Idea - e.g. our startup or business
❖ Step 2: ??? - this is the crux of the thing.
❖ Step 3: ???

15. What we want:
❖ Step 1: A Great Idea - e.g. our startup or business.
❖ Step 2: ??? - this is the crux of the thing.
❖ Step 3:

16. Reality:
❖ Step 1 - 3:

17. Welcome to your Company: CPaaWS
❖ You had a brilliant idea - Cat Pics as a Wonderful
Service!!
❖ You charge $0.30 per cat pic and expose a RESTful,
Resourceful, Highly Available API. Life is good … and
Simple!

18. Until you have to take money.

19. Choose your Payment Processor Wisely…
❖ Who takes your customer’s money and gives it to you?
❖ Stripe? Braintree? Authorize.net? PayPal? Someone
else?
❖ You have options.

20. Per-Transaction collections!
❖ A “simple” model on paper - for every cat picture you
sell you take money. 💸
❖ Does your Payment Processor charge you a per-
transaction fee?
❖ If so… can you batch transactions to “month end”?
(Complexity)

21. Periodic Rates!
❖ Ruh-roh! Your excellent marketing team does market
research and realizes that a monthly (unlimited) rate
makes sense.
❖ $5.00(USD) per month for UNLIMITED Cat Pictures!!!

22. Rationalize.
❖ OK. $5.00 / month seems “simple.”

24. Engage.
❖ OK. $5.00 / month seems “simple.”
❖ But what about that poor user who joins September 29?
❖ Do you charge them a month? Or just ignore it and
make it a (good) press thing?

25. Metered Services! How do you measure?
❖ $1/mo = $?? / hour - this should be easy but…
❖ Months have different numbers of days: February has
672 hours (except on a leap year!) and October has 744.
❖ Fluctuating bills are a bummer… do you always round
down? Or move bills around on users?

26. But… when do you charge them?
❖ Do you collect on their monthly anniversary? e.g. your
user joins on the 31st you charge them on the 31st.
❖ Cool story … what about in February? The solution
isn’t hard but it is an edge case.
❖ Do you just charge them on the 1st of the month? How
many API calls to your payment processor is that? Can
your infrastructure handle them?

27. Taxes … prefer death? 💀
❖ Taxes are hard.

28. Taxes … prefer death? 💀
❖ Taxes are REALLY hard.

29. Taxes … prefer death? 💀
❖ Taxes are UNBELIEVABLY REALLY hard.

30. GET A REGIONAL TAX
ADVISOR.

31. Taxation
❖ Taxation depends on the type of service you provide -
get professional advice.

32. Taxation
❖ Taxation depends your location and business type -
get professional advice.

33. Taxation
❖ Taxation depends your location and business type -
get professional advice.

34. Taxation
❖ Taxation depends your location and business type -
get professional advice.

35. Taxation
❖ Taxation depends your location and business type -
GET PROFESSIONAL ADVICE!!!

36. (Hypothetical) Taxation - EU Edition
❖ If you are charging VAT in the European Union (after
consulting your taxation consultant)…
❖ Did you know there are VAT Exempt Zones? (e.g. The
Faroe Islands. The Channel Islands. The Canary
Islands. The Waters of Lugano. Vatican City.) And that
you need to handle them?
❖ How do you determine the taxation location of your
customers?

37. (Hypothetical) Taxation - EU Edition
❖ If you are charging VAT in the European Union (after
consulting your taxation consultant)…
❖ Did you know that if a customer has a VAT ID you don’t
charge them VAT? It is their responsibility to remit at
the end of the year?
❖ How do you validate their VAT ID which gets them out
of paying VAT to you? VIES!

38. (Hypothetical) Taxation - Canada Edition
❖ Are you charging VAT in Canada (e.g. GST, HST, PST, or
otherwise)?
❖ How do you determine which taxes to charge? - Taxation
Consultant
❖ How do you determine the province in which a
customer lives?
❖ What about First Nations? They are tax exempt!

39. Coupons! Discounts! Promotions!
❖ Oh yeah.
❖ So… Marketing, and you, out of the kindness of your
heart, want to give your service away or at least make it
cheap to early adopters…
❖ Don’t forget - Net vs. Gross is a thing. If you have to
charge taxes - you probably only charge on Net.
❖ Consult your Consultant. It’s literally their only job!

40. Extra Credit: What about other Currencies?
❖ Some countries require you, if you do business there, to
take money in the local currency.
❖ Does your payment processor allow customers to pay in
those currencies and facilitate some nature of
conversion?

41. Extra Credit: What about Localization?
❖ Some countries require that if you have a business entity
there that your website be translated to the local
language.
❖ Even if you’re not required, it may help you gain
traction and take money!
❖ Are you prepared for that?

42. Your Destiny ^^ We Hope!

43. Questions?

44. Thank You!