Startup founders and early finance leaders often get it backwards when evaluating the ROI of getting sales tax compliant. Many put off thinking about sales tax because it feels like a big project, with little upside for investing early.

Luckily, when John Rodriguez became the first Controller at Pave, a startup building compensation benchmarking and planning tools, he already knew better.

In a previous role, Rodriguez had joined a company that was overdue on becoming compliant. His accounting team had to go through the tedious process of filing voluntary disclosure agreements for uncollected sales tax with multiple states.

Ultimately, they paid the sales tax they hadn’t collected from their customers out of pocket, to the tune of hundreds of thousands of dollars. And money wasn’t the only wasted resource.

“It took a lot of time—a lot of finance time, a lot of tax time—trying to figure it out,” Rodriguez says. “Anytime you deal with tax authorities, it's always a pain.”

So when Rodriguez joined Pave at 60 employees, getting a sales tax solution in place was high on his list—not only to protect the fast-growing company, but to minimize the time his team needed to spend on compliance.

“I said, okay, we’re a SaaS company,” says Rodriguez. “I know sales tax compliance is going to become an issue, and I need to get ahead of it.”

Finding a low-lift sales tax solution

Having learned things the hard way, Rodriguez knew he’d need to find a way to deal with sales tax without draining company resources. As he evaluated sales tax solutions, he kept two things top of mind: accuracy—to avoid costly penalties—and the time his team would need to spend implementing and maintaining the tool.

“It had to be as easy as possible because we’re a very early-stage company, and the team is very small,” Rodriguez says. “Finance tends to be a very lean team, and I was looking for something that could help us take care of sales tax without having to hire a person to manage it.

Rodriguez considered several legacy sales tax tools, but was concerned they’d require too much oversight from his own team.

“I had calls with them and they didn't seem very attentive. Like, maybe we were too small for them, or, the fees were not going to be high enough,” says Rodriguez. “ I felt like they weren't really catered to SaaS, and they were also very expensive.”

He reached out to his tax firm, who recommended Anrok as a SaaS-focused solution that could check the right boxes for Pave.