Patreon simplifies 1099 reporting with Sovos

Case Study

Patreon

Patreon, a fast-growing start up, simplifies 1099 reporting with Sovos.

Summary

Business Challenges

  • Patreon’s rapid growth turned 1099 reporting into a massive time investment
  • 1099 reporting took time and focus away from growing Patreon’s own platform and enhancing its customers’ experiences, which are its most important business goals
  • Patreon didn’t have a dedicated person or department that handled 1099 reporting, which meant its staff had to re-learn the reporting process every year
  • No one at Patreon was familiar with the B and P notice process, which increased its penalty exposure

Solution

  • Patreon automated and outsourced its 1099 reporting obligations to Sovos
  • And it took advantage of Sovos’s TIN matching API

Benefits

  • Using Sovos simplified Patreon’s 1099 reporting process
  • It increased its reporting accuracy
  • It reduced its B and P notices
  • and saved time
  • this empowered Patreon to refocus that time on growing its platform and enhancing its customers’ experiences

The Company

Patreon is a membership platform for creators headquartered in San Francisco, CA. Patreon was founded in 2013 and has 200 employees.

The Challenge

Patreon’s rapid growth turned tax reporting, specifically 1099 reporting, into a massive time investment. The bigger the business became, the more W8s, W9s and 1099s it had to report, which took time and focus away from its ultimate goal: building a product to fund the creative class. Additionally, Patreon did not have a dedicated person or department that handled 1099, nor a teammate who was familiar with B and P notices.

The Solution

Patreon took advantage of Sovos’s TIN matching API, enabling the company to create its own W8s and W9s in its system and validate them while a customer is filling out the form. This service ensures Patreon is collecting the right data up front, saving time and effort during tax season and reducing future B and P notices. Sovos also took on the responsibility of sending out 1099s to the creators who use Patreon’s platform. Danielle Childs, senior product manager, owns 1099 reporting at Patreon. She said that “By bringing Sovos in we’ve simplified our process. Today, one person can see what the status of our 1099 forms is and upload the data to Sovos rather than needing the support of engineers and operations teams.

Patreon also took advantage of Sovos’s e-statements offering. “Adding e-statements reduced the requests for old forms and the cost of sending incorrect forms to our creators,” Childs said. This is especially important for a growing company as the costs associated with sending out incorrect forms will grow with them.

“Being able to validate [TIN/Name information] with Sovos when a new customer fills out the form ensures we’re getting the right data upfront and saves us a ton of downstream operational work. On top of that, being able to submit our data to Sovos to send out our 1099s is something we don’t have bandwidth to support ourselves so to be able to outsource that means we can focus resources on working on our product.”

Danielle Childs

Sr. Product Manager Patreon

Why Sovos?

Sovos’s white glove customer service and support is a great benefit for Patreon. “Our managed service representative is always on top of our account and checks in with me consistently to make sure we are fulfilling each step of the process correctly and in a timely manner. It’s very helpful to have the Sovos team of industry experts just a phone call away,” said Childs.