
Ask HN: Would you use a service that automates accounting for SaaS companies? - nathan_f77
I&#x27;ve just started a company with Stripe Atlas, which was really streamlined and easy. I was a little surprised to learn that I&#x27;ll need to pay an accountant thousands of dollars to file my corporate income taxes. I knew I would need help from attorneys and accountants, but it feels like most of this should have been automated by now. And if I use Bench [1], I&#x27;ll also need to spend $115 per month for bookkeeping.<p>I&#x27;m running a pretty simple SaaS app [2]. I take payments via Stripe, spend money on Heroku and AWS, and... not much else. I feel like it shouldn&#x27;t be that hard to automate my bookkeeping and automatically file IRS Form 1120 (and Form 5472.)<p>I&#x27;m thinking about building a service that does this for small SaaS startups, and companies that make money from mobile apps. I&#x27;ve put up a landing page: https:&#x2F;&#x2F;www.nanobooks.co<p>I need to validate the idea before I start writing any code or working with accountants. Please leave a comment (or sign up for the mailing list) if this is something you need, or would have used in the past. I&#x27;d also love to hear any feedback, or advice about how I could validate the idea.<p>Thanks very much!<p>[1] https:&#x2F;&#x2F;bench.co<p>[2] https:&#x2F;&#x2F;formapi.io
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jeffmould
A few things:

1) While I pay an accountant to file my taxes, the biggest benefit I get is
(a) knowing/understanding the tax law; and (b) most importantly knowing what
deductions and/or credits are available to me and my business.

2) In my opinion, if you have a basic business there is no real reason to pay
a monthly bookkeeping company. Pay an accountant to get you set up on
Quickbooks (or some other online accounting software) initially, and have them
teach you how to enter income and expenses.

3) Software such as Quickbooks makes automating taxes pretty straightforward
once setup correctly, especially for a simple business.

Where tax filings get complicated is knowing what forms need to be filed when.
Once you start mixing state and local taxes into the mix it can be a little
overwhelming at first.

The problem with automating all of this is that the tax laws change so much
keeping up across all the states and cities would be a challenge. Next, you
would possibly have to work with governments to be able to e-file in bulk.

For me personally, I already pay an accountant that handles these filings and
more for me. I would be hesitant to pay another service, especially an
unproven one, when it comes to taxes.

~~~
nathan_f77
Thanks, that's great feedback! That's a good point about basic businesses not
needing a monthly bookkeeping company. I've been pretty happy with Wave, so I
don't think I need Bench yet.

And I agree, it would be difficult to stay up-to-date with all the tax laws.
Ideally I would want to have an accountant as a co-founder, or at least work
closely with an accountant who specializes in startups. The idea is that one
accountant would create a streamlined process for all startups with similar
situations. Then startups could pay a much smaller fee for a repeatable
process. In your case, it sounds like your tax situation might be a little
more complicated. But I do want to stress that we would have an accountant who
double-checks everything, especially for the first customers.

~~~
sharemywin
The problem is on the expense side:

you just bought a computer do you expense it? depreciate it?

You had someone build a component for your website? is that expensed? or was
that a capital expenditure?

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sirspacey
Yes! This is one of the most broken aspects of running a SaaS business. My
last startup paid tens of thousands for accounting work that had to be
constantly redone, across multiple "startup specialist" vendors that we tried.
For startups under $1M ARR the strategies for tax compliance/savings are
straight forward

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billconan
seriously? thousands of dollars for corporate income taxes? is this because
you registered a c corp?

I'm about to register a s corp in California for a SAAS like yours., my
friends did it told me that they just hire a local CPA for about 200 bucks.

they even told me turbotax (some beefy version) can do it too.

few thousands bucks for tax filing would be a serious cost for me.

~~~
nathan_f77
Yep, that's because Stripe Atlas sets up a c-corp. They set up a lot of
companies for non-US citizens, and you have to be a US citizen or resident to
set up an s-corp. S-corps don't need to file corporate income taxes at all,
because all income is passed through to the owners.

I've just realized that my market is actually non-US citizens who set up a US
company (via Stripe Atlas or something else.) On the other hand, maybe I could
also help US citizens fill out their individual tax returns (Form 1040), if
their only income is from a SaaS product. The bookkeeping piece could still be
useful. I might charge something like $150 per year, or $15 per month, and you
wouldn't need to hire that CPA for $200.

Thanks, that was extremely helpful!

~~~
sharemywin
there are plenty of online sites for filing 1040s:

here's a list of efiling companies for 1120s: [https://www.irs.gov/e-file-
providers/tax-year-2016-1120x-and...](https://www.irs.gov/e-file-
providers/tax-year-2016-1120x-and-7004-modernized-efile-mef-providers)

here's a developer conference: [https://www.irs.gov/2017-software-developers-
conference](https://www.irs.gov/2017-software-developers-conference)

