Indeed, we only scratched the surface of the complexity of metered billing, we'll do a deep dive soon on this topic (it does deserve its own post).
I think for the'nightmares' you mention:
- some might be specific to utility (not applicable to an online business), such as '- meter readings are available on dates totally independent from billing cycle'.
- Some topics might be simpler for a utility co: tax for instance (you know where your users are, and they are limited to a geographic region)
- But some nightmares such as '- the prices can change mid-billing cycle for some customers but the consumption data is not available with that granularity' do really resonate for online businesses too, indeed
Thanks for sharing, great insights for our future post!
For online businesses as well, selling above a certain amount of revenue or product can trigger what's known as a nexus event in taxation wherein the business becomes liable for collecting sales or use tax. Now online businesses are on the hook for collecting sales tax in every jurisdiction above wildly varying threshold values. Should the business fail to collect the sales tax for selling from Montana to California for instance, then the business will be liable for sales tax not collected for products or services sold to California residents online even though the business might physically reside in Montana.
Is there an easy way to deal with this e.g. compliance as a service?
Sounds like a nightmare to deal with, of course this is only assuming it is enforced. If it is not well who cares, companies like Lyft/Uber view laws as a starting point in negotiations when expanding into new areas not as a brick wall of dogma.
> Is there an easy way to deal with this e.g. compliance as a service?
I think we call ourselves CPAs :). In all seriousness the 'solution' depends on what industry we're talking about. Short term rentals? Avalara. Software as a service? Various accounting firms and startups. Etc.
Indeed, we only scratched the surface of the complexity of metered billing, we'll do a deep dive soon on this topic (it does deserve its own post).
I think for the'nightmares' you mention: - some might be specific to utility (not applicable to an online business), such as '- meter readings are available on dates totally independent from billing cycle'. - Some topics might be simpler for a utility co: tax for instance (you know where your users are, and they are limited to a geographic region)
- But some nightmares such as '- the prices can change mid-billing cycle for some customers but the consumption data is not available with that granularity' do really resonate for online businesses too, indeed
Thanks for sharing, great insights for our future post!