Avalara — AvaTax

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From the August 2007 Review of Sales & Use Tax Systems

Avalara’s AvaTax is a real-time sales and use tax application that automatically looks up, verifies and posts appropriate sales tax rates to invoices, estimates and purchase orders. The system integrates with a business’ ERP or financial software but is actually web-based so that sales tax rates are always accurate and updated and maintained by Avalara. AvaTax supports more than 12,500 tax regions in the United States and Canada and offers a managed compliance option that relieves the business of virtually all forms preparation and payment tasks. The system offers integration with Intuit’s QuickBooks line; Microsoft’s Dynamics AX, Dynamics GP and Dynamics NAV; Sage Software’s Accpac, MAS 90, MAS 200 and 500; as well as systems from Epicor, ProStores and eCommerce/SDK. Support for Peachtree is anticipated in August. Multiple business entities can be a single AvaTax subscription. In a convenient parent company/child company setup, similar tax profiles can be replicated to save setup time. Pricing is based upon the accounting/ERP system with which it integrates as well as the volume of transactions. For QuickBooks, the pricing structure starts at $9.95 per month plus $.65 per transaction, with a $49.95 activation fee. As transaction volume rises, charges decrease to as little as $.30 per transaction.

Navigation & Data Entry -- 5 Stars
Avalara’s integration with the sales and financial programs used by a business results in a system that automatically handles the rates lookup and posting of sales tax to each transaction, with no action required by the user. The program also integrates directly into e-commerce systems, automating the posting of sales tax data to customers’ online shopping carts. Sales tax rates are verified through ZIP+4 and the new AvaLocate feature, which provides increased accuracy for gerrymandered tax zones. With more than 60 million data points in the United States and Canada, AvaLocate is more precise than using only a ZIP+4 method for verification. Plus, Avalara works directly with state agencies to maintain the most current tax information, including sales tax holidays, special exempt items and other details.

With data-entry processes automated, the primary functions of the user focus on managerial oversight, with the AvaTax Dashboard acting as the administrative console. The web-based Dashboard provides real-time access to reports and top-level information, with the ability to drilldown to specific transactions to view sales and tax information, including a breakdown of all taxing jurisdictions that influenced a particular transaction. The solution’s reports can be exported into spreadsheet form. Avalara has recently increased the functions available from this admin console, with the system now offering additional report functions and simplified reconciliation adjustments. Since the program is web-based, authorized users can access the sales and tax data from any location at any time.

Filing, Electronic Compliance & Payment -- 4 Stars
An optional Managed Returns Service subscription is available for AvaTax, wherein all compliance is handled by Avalara, including submission of electronic or paper-based forms (as required by each jurisdiction) and remittance of collected funds. Automated workflows in AvaTax, assisted by tax professionals at Avalara, gather the sales and tax information from the business’ records, and the business transfers the appropriate total liability for each period, after which Avalara handles all of the filing. Pricing for this service is based on the number of jurisdictions to be filed to, but can cost between $25 and $45 per return. The system includes review processes and an audit-trail feature that tracks revisions and maintains a record of adjustments. AvaTax does not include due date monitoring or alerts for reminding users of compliance deadlines.

Rate Updates -- 5 Stars
Since the program is actually hosted on Avalara’s secure servers and a business’ financial and accounting programs tap into it for rate information, the program always has the latest tax rates. Program and rate updates for more than 8,000 taxing jurisdictions are maintained by Avalara staff.

Help/Training -- 4.5 Stars
AvaTax includes basic assistance features within the program, while online support provides basic FAQs and a KnowledgeBase. Phone and web-based support is included in program pricing. AvaTax University is the formal training program available for all customers and is included in the subscription price. Six regularly scheduled weekly online classes are available and include basic AvaTax Dashboard setup and reporting capabilities as well as classes designed for specific ERP integrations. As well, technology consultants across the United States offer implementation support and various training options.