Subscription business model was an obvious choice for Voverc. “We are a SaaS company and with our solution, we've moved companies from using our CAPEX solution to an OPEX solution”. The challenges stemmed from operationalizing the subscriptions while being attuned to the changing legal and compliance landscape in Italy specifically, and the EU in general.
- Compliance woes: As of January 1, 2019, eInvoicing was made mandatory for B2B and B2C VAT-registered Italian businesses. The invoices need to be issued in the FatturaPA format and submitted to the Italian Revenue Agency's e-invoicing platform, Sistema di Intercambio (SDI) — a platform used to transmit e-invoices to the Italian Revenue Agency.
Voverc was processing far too many monthly invoices to ignore the enormity of the compliance. This pain was exacerbated when Voverc was in the midst of a strategic and critical acquisition by Wildix, developers of browser-based unified communications solutions and VoIP products. Compliance was proving to be far more of a growth inhibitor.
- Late payments as a cultural problem: Italy has continued to have the highest percentage of businesses that are impacted by overdue invoices. Unlike most countries, business users in Italy do not entirely trust payments via credit card that would ideally facilitate faster payments. In a 2018 survey by Atradius, nearly 40% of the respondents have expressed businesses being hurt by late payments. That led to Voverc suffering from late payments and churn.
- EU-VAT for payments that aren’t processed: With customers potentially cancelling or facing payment issues, or forgetting to pay, churn was becoming a problem, and to add to it, the EU VAT levied in each of these invoices that weren’t paid for, proved to be heavier.
The Launch Plan that allowed Voverc to use Chargebee for free till they hit their first $50K in aggregate revenue, along with Chargebee’s depth of capability and a strong commitment to partnership and collaboration was one of the key deciding factors for Voverc. Chargebee promised growth.
- Chargebee facilitated compliance with Italian e-invoicing through Quickbooks Italy. In order for them to fully be complied with Italian e-invoicing, they had to send invoices through Quickbooks to their customers. Vovercapp integrated Chargebee with Quickbooks, with Chargebee being their main source of reference for subscriptions and related details.
Voverc’s customers appreciate Voverc’s transparency and fair billing practices. Voverc, as a principle, has a very liberal payment policy. If customers are unhappy with the product, they are allowed to cancel within 30 days and will be issued a full refund. Read about Chargebee + Quickbooks
- Chargebee’s Fair Billing and fraud management with GDPR, enable Voverc to exercise fair billing practices, with a clear breakdown of charges, that encourages their customers to input their card details with far more trust and facilitate better transactions.
- With Chargebee’s Dunning Management suite, an issue with a payment failure was automatically handled and churn was significantly addressed. Voverc also used Chargebee’s webhooks to have the customer activate or deactivate a customer depending on their payment status. See how Chargebee manages your dunning process
- Chargebee’s compliant Credit Notes helped saved them from messy tax complexities — Voverc issued them for new customers who have signed up for an annual contract as means of giving credits, so they could benefit from them in the subsequent invoices.
Failing to comply with the latest compliance regulation would have costed Voverc a heavy penalty — one that could have ranged from 90% to 180% of the VAT inaccuracy, along with the invoices being deemed as unissued.
Leonardo Coppola, Co-Founder and CEO of Voverc phrases it better when talking about Chargebee’s consultative and committed approach to ensure everything was on track — “We were in the process of an exit and it became important to do the due diligence including for billing and contracts. During that busy period, thanks to you guys, we were able to manage to close the exit without forgetting to be compliant with these new regulations.”