Avalara – AvaTax Connect - CPA Practice Advisor

From
the August 2006 Review of Sales & Use Tax Systems

AvaTax is a web-based sales tax compliance system that integrates directly
with a business’ accounting software to automate much of the processes
involved with sales tax compliance and remittances. As a hosted solution, the
system is constantly updated by Avalara to maintain accurate rates for more
than 8,000 jurisdictions in the United States and Canada, providing all forms,
electronic compliance and reporting tools. The online system uses secure servers
and maintains strict data protection strategies. Pricing tiers for AvaTax are
based on usage. For integration with QuickBooks and up to 719 transactions per
year, system activation costs $49.95, with monthly charges of $9.95 and a $0.65
fee per transaction. Higher tiers provide up to 24,000 transactions per year,
with variable activation fees and no per-transaction costs. Pricing differs
based on the accounting application with which the system is integrated. The
system currently offers integration with Intuit’s QuickBooks line, Microsoft
Dynamics GP, Microsoft Dynamics NAV, Sage MAS 90 ERP, Sage MAS 200 ERP, Sage
500 ERP, Sage Accpac ERP and Scala/iScala. As well, with AvaTax SDK (Software
Developers’ Kit), Avalara’s Web services API can be linked with
any e-commerce or third-party accounting application.

Navigation & Data Entry — 4.5 Stars
After initial setup of the system, most AvaTax functions are automated, invisibly
setting up and maintaining the tax rates in the business’ sales or AR
module and providing address and ZIP+4 based recognition of taxing jurisdiction.
The address verification system checks addresses against Avalara’s USPS
database for verification, validation, and correction, then a lookup is performed
in real-time for rate determination. AvaTax basically sets up a bridge between
it and the accounting system, tying in all calculations and reporting functions
without any change to the user’s existing workflow. The system also includes
reporting and administrative functions, which are accessible via a secure online
interface, AvaTax Dashboard, that enables management to set up user rights,
business information like nexus, product taxability and exceptions, returns
preferences, and other functions including a quick tax rate lookup feature.
The system also supports tax holidays, maximum and minimum taxes, and split
taxes.

AvaTax reports provide drill-down access to source transactions with line
item detail, and often integrates back to the accounting program when viewing
reports on-screen. The system supports only one company per subscription, so
users with more than one entity within their accounting application will need
multiple subscriptions. The ease of implementation of the AvaTax system was
among the most significant benefits to Tapco Circuit Supply, a national provider
of materials and process solutions to the printed circuit industry. Roy Devadas,
the company’s IT manager, had only three weeks to implement a new solution
after his company merged with another. “It was easy to get running and
is pretty much foolproof once implemented,” Devadas said.

Filing, Electronic Compliance & Payment — 4.5 Stars
AvaTax automatically draws sales and tax account data from within the business’
accounting system and then prepares returns, schedules and worksheets for all
necessary jurisdictions, leaving the user in charge of compliance primarily
with review tasks. The program brings up the prepared compliance forms and reports
on-screen, with all data automatically populated with sales and tax data. AvaTax
also automatically calculates use tax based on jurisdiction.

Rate Updates — 5 Stars
Since the program is online, all rate updates for all 8,000+ taxing jurisdictions
are updated by Avalara’s staff, with no action required by the user. Obviously
a timesaver, this also helps ensure that rates are always correct, which helps
to avoid penalties.

Help/Training — 4 Stars
Avalara offers phone and web-based support and partners with technology consultants
for implementation and training, although the system takes about five minutes
to install and is fairly straightforward in use. AvaTax support is included
with the subscription cost of the system.

Relative Value — 4 Stars
Online sales tax compliance tools make sense for companies doing business with
customers in multiple taxing jurisdictions for which the business is required
to collect and remit taxes. Having always-updated tax rates for these jurisdictions
saves headaches, time and penalties, and not having to constantly keep up with
new rate CDs is also a plus. Businesses participating in the multi-state Streamlined
Sales Tax (SST) program can sign up with Avalara for benefits under the program,
as it was certified in May by the SST Governing Board as one of only three Certified
Service Providers (CSPs), and the only CSP focused on the SMB marketspace. With
the addition of forms generation, and its recent selection, AvaTax Connect now
offers a complete and automated sales tax compliance system that provides excellent
support for most small and midsize businesses by integrating directly with their
SMB accounting systems, resulting in an almost hands-off system.

2006 Overall Rating: 4.5 Stars

Technology