Walk me through your revenue model from an accounting standpoint. Who is the merchant of record, and how does ASC 606 treat your subscriptions — on both our sides of the transaction?

The full executive answer

The billing structure: we sell tiered SaaS subscriptions — monthly or annual with roughly 17% off annual — processed through Lemon Squeezy acting as merchant of record, with Stripe also integrated in the billing layer. The merchant-of-record structure matters more than it sounds: Lemon Squeezy is legally the seller to you, which means they carry the obligation to calculate, collect and remit sales tax, VAT and GST across jurisdictions globally. For a company our size that is deliberate risk engineering — global indirect-tax compliance handled by a specialist at scale rather than a two-person finance function learning fifty tax regimes — and for you it means a clean, tax-correct invoice in your jurisdiction from day one.

Under ASC 606 — the five-step revenue-recognition standard — our side is straightforward: the contract is the subscription, the performance obligation is continuous access to the platform over the term, so revenue is recognised rateably over the subscription period, never on cash receipt. An annual prepayment sits as deferred revenue and amortises monthly. The nuance the merchant-of-record structure adds is on gross-versus-net presentation under the principal-versus-agent guidance in 606 — we recognise our net platform revenue while the merchant of record handles the consumer-facing transaction and indirect taxes. Internally our pricing module computes recognised monthly revenue per organisation with explicit rules: non-billable statuses — cancelled, paused — recognise zero regardless of tier, so our own metrics cannot inflate by counting dead subscriptions at list price.

On your side of the ledger it is simpler still: a subscription is a period operating expense — no capitalisable licence asset, and generally outside the scope of lease accounting under ASC 842 as a service contract. Procurement can treat it as a standard SaaS vendor line with monthly or annual terms.