XborderCo

Strategy

Core vs Context: Why VAT compliance should never be in-house.

Geoffrey Moore, author of "Crossing the Chasm" and "Dealing with Darwin", developed a framework for deciding what to build versus what to outsource. The answer depends on whether an activity is "core" or "context" to your business. For SaaS companies, VAT compliance is textbook context.

Core

Activities that create sustainable competitive differentiation. This is what you invest in that your competitors do not. Core activities win customers and drive growth.

Context

Activities that are necessary to operate but do not differentiate you. They bring in money but are not what makes your company unique. Think payroll, IT support, compliance.

The key insight

"When activities become context, companies should focus on cost reduction, standardization, and outsourcing to companies where this activity is their core."

Apple designs products (core) but outsources manufacturing to Foxconn (where manufacturing is core). The same logic applies to VAT compliance.

Where does VAT compliance fit?

VAT compliance is clearly context for SaaS businesses. Here is why:

It is mandatory

VAT obligations exist whether you want them or not. Selling into a country triggers registration requirements.

It does not win customers

No prospect has ever chosen your product because of your excellent VAT filings. Compliance is invisible when done right.

Getting it wrong hurts, but getting it right does not differentiate

Mistakes lead to penalties and audits. But perfect compliance is simply expected, not celebrated.

It consumes resources that could go toward growth

Every hour your finance team spends on VAT is an hour not spent on strategic work, fundraising, or scaling operations.

Moore's five levers for extracting resources from context

  1. 1Centralize under a single authority
  2. 2Standardize processes across jurisdictions
  3. 3Modularize away from core systems
  4. 4Optimize through automation
  5. 5Outsource to a specialist

XborderCo applies all five: we centralize your VAT obligations under one provider, standardize processes across jurisdictions, modularize compliance away from your core systems, optimize through automation, and take full ownership as your outsourced specialist.

What this means for SaaS companies

Your Core

  • Product development
  • Customer experience
  • Sales and growth
  • Market expansion

Your Context

  • VAT registration
  • Filing and remittance
  • E-invoicing compliance
  • Audit defense

The Decision

  • Outsource context
  • Focus on core
  • Let specialists handle compliance
  • Grow without liability

Focus on your core. Let us handle the context.

XborderCo exists to make VAT compliance our core so it does not have to be yours. We handle registration, filing, invoicing, and liability so you can focus on building your product and growing your business.

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