One benefit of serving thousands of recurring businesses is that we can see macro trends related to how businesses adapt to better serve their subscribers. A growing trend is the evolution from simple, static subscriptions to complex, sophisticated offers with frequently changing pricing schemes. The ability to deliver complex offers allows recurring business to get away from one-size-fits-all solutions and deliver tailored offers to specific customer segments at scale.
This emerging trend has created multiple downstream billing requirements, such as the need to appropriately tax many different types of products and services within a single subscription. Chargify is happy to announce enhanced functionality that solves this problem through fine-grained control over how individual components handle sales tax with our tax automation partner, Avalara.
Because different products are taxed at different rates (e.g., digital goods vs. physical goods), it is important to be able to apply the correct tax rates for each individual product and component add-on within a single subscription. With this product release you can now control the tax type at both the product and component level.
Here is a view of what this option looks like in Chargify’s product and component settings:
Sample Use Cases:
- A payroll software company charges their customers for a monthly software subscription and a monthly delivery of paper checks.
- A hardware provider charges their customers a monthly fee for hardware rental, a monthly fee for priority support, and a monthly fee for the underlying software that runs on the hardware.
In both cases above, the business can now configure the appropriate tax codes for each item included in the described subscription. All the appropriate charges and taxes will roll-up accurately and be reflected in the customer’s end-of-period statement.
To learn how to configure component level tax codes, check out our documentation.
Last month we released capabilities that allow components to maintain multiple price points, and last spring we released custom product & component discounting. Now, with the combination of component price points, custom discounting, and component level taxation, businesses can leverage Chargify’s flexible product catalog to create, implement, and adapt offers that maximize revenue and accelerate growth.