Accounting software for hosting companies: subscriptions, VAT and currencies

Recurring revenue, international customers and VAT rules. Here is how a hosting business should set up its books.

By the AvrioBooks team · · 6 min read

Accounting software for hosting companies: subscriptions, VAT and currencies

This is general information, not tax or legal advice. Check GOV.UK or ask an accountant about your own situation.

A hosting company sells subscriptions to customers around the world, often paid by card. The books need to handle recurring invoices, foreign currencies and VAT on digital services.

Recurring revenue

Use recurring invoices for monthly and annual plans. Decide how you treat annual payments received in advance, since income is normally spread over the period. Ask your accountant about revenue recognition.

Payment processors

Card processors pay you net of fees and often in batches. Record the gross sales, the fees and the payout so the bank reconciles. Bank rules can categorise the repeat entries.

Selling abroad

VAT on digital services depends on where the customer is and whether they are a business. Check the rules before you sell, and use the right tax rate on each invoice.

Currencies

If you bill in dollars or euros, record exchange rates and gains and losses. See foreign currency gains and losses.

Costs

Track servers, bandwidth, software licences and support as separate accounts to see your gross margin.

How AvrioBooks fits

Recurring invoices, bank rules, multicurrency and VAT returns (Standard and above) are included. See accounting software for startups. AvrioBooks has no billing engine, so use a billing or payments system for the subscriptions themselves.

What AvrioBooks does not do: it is accounting software, not a payroll, time-tracking or job-scheduling system, and it has no automatic bank feeds (it imports CSV, OFX, QFX and QIF statements). Use specialist tools for those jobs and bring the figures into your books.

Frequently asked questions

Can I bill monthly and annually?

Yes, with recurring invoices. Recurring invoices are created as drafts for you to review.

How do I handle card processor fees?

Record gross sales, fees and the net payout so the bank reconciles, and use bank rules for repeat entries.

Is AvrioBooks a billing platform?

No. Use a billing or payments system for subscriptions and keep your books in AvrioBooks.

Written by the AvrioBooks team. We build cloud accounting software for small businesses, freelancers and their accountants, from Qodexify. This article is general information, not tax, legal or financial advice. Check GOV.UK or ask an accountant about your own situation.
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