Tax doesn’t have to be taxing with AvaTax for Magento
Tax accounting can be a daunting task for businesses of any size. Ordering a product from one state or jurisdiction and determining which tax rates apply, what those values are, and ensuring the customer or business has properly accounted for the tax & associated tax regulations can become a significant issue especially when it comes time to filing tax returns & ensuring compliance. Throw into the mix tax exemptions, the spectrum of differing rules, laws, and rates, and there is a serious problem that exists for any business hoping to scale upwards and increase sales while remaining tax compliant & efficient in their operation.
For larger businesses with hundreds or thousands of transactions to keep track of, automating the approach is not only crucial to the success of the business, but mandatory as manual tracking is not only time consuming, but a major liability as it is prone to human errors and omissions that can result in accounting fraud, fines, or much more serious repercussions from an audit situation.
Fortunately, businesses are not left to fend for themselves. In the age of cloud computing, products now exist that can fully-automat transactional tax accounting systems and integrate into existing e-commerce platforms, effortlessly, efficiently, and within a relatively short amount of time. There no longer is a need for manual data entry, hiring a huge team of accountants ready to interpret an ever-changing tax system, or the opportunity to make mistakes every turn that you make.
Introducing Avalara AvaTax Integration for Magento
Avalara AvaTax integration to Magento is a seamlessly automated system for eliminating the burden of manual transactional tax accounting for your business. This cloud-based platform provides easy access for e-commerce store owners, is fully automated with built-in statutory tax content which includes tax rates, taxability rules, tax jurisdiction boundaries all while simplifying the sales process.
Whether you are facing a tax audit or striving to improve your record keeping or product lifecycle, being able to maintain accurate records of customer transactions, pull reports, and present data that shows accurate tax rates have been applied is not only essential to the foundation of any business but can help to avoid hefty penalties or fines levied unexpectedly at the most inopportune times.
What is Avalara?
Avalara, Inc. is a comprehensive cloud-based solution for tax compliance automation. Their software helps simplify the tax compliance process with an end-to-end suite of solutions. From a broad level their software helps:
- Determine taxability
- Identifies applicable tax rates
- Accurately calculates taxes
- Prepares and files returns
- Remits taxes
- Maintains tax records
- Manages tax exemption certificates.
Avalara integrates with many e-commerce platforms and can be easily setup to revolutionize the way you might be currently accounting for transactional taxes and managing tax records or filings. One of the greatest features of Avalara is how it works within your own financial, billing, e-commerce, or POS system delivering real-time tax calculations in a secure connection to your current platform. Upon initial configuration, Avalara is good to go and never has to be changed with respect to tax rates, boundaries, exemptions, tax rules, holidays, reporting requirements etc… Being able to reduce such complexity to a simple system that works, managing transaction calculations in less than a second is incredibly powerful.
What are some of the Key Features of Avalara?
- Advanced tax calculator
- AvaTax calculates over 12,000 jurisdictions in the United States with instant updates.
- Support across your organization
- Because AvaTax is cloud-based, multiple points of entry can be applied across your organization.
- Product taxability
- AvaTax includes thousands of tax rules that are applied to every product within your catalog for accuracy in calculations for every jurisdiction.
- Address validation
- AvaTax automatically validates and ensures transactional tax calculations are accurate on a house-by-house basis.
- Manage Lifecycle
- One of the great advantages of AvaTax is the extensive database of rates across over 12,000 jurisdictions. The automation is a key advantage over any other system that is currently out there.
- Large User Base
- With over 4000 AvaTax users processing upwards of 4 billion transactions and counting, with a low turnover of users, these impressive customer retention numbers shows overwhelming support of the product and validates how much the current user base approves of the platform.
- No Guesswork
- 100% accuracy with respect to rates and tax regulations is at your fingertips with robust reporting capability and tax experts available through their company.
- Eliminating time-wasting activities such as data entry, address verification, as well as automating real-time transactional tax calculations is a major productivity enhancer that ultimately reduces your workload.
- One of the coolest benefits of their software is that it is pay per use and only applies when there is
- Avalara works within the users own e-commerce platform and calculate tax rates by cross-checking an extensive array of data considerations based on geolocation, address, taxing jurisdiction, tax exemptions, holidays, tax rules and regulations – all in less than 1 second.
The company employs over 1000 people around the world. Their support ranges over tens of thousands of business and across 100 countries. In addition, they remit billions in sales and use tax collections every year and file hundreds of thousands of tax returns annually.
Avalara currently controls one of the largest libraries of statutory sales tax content, enabling tax decisions on millions of products.
- What is Magento?
Magento, simply put, is an e-commerce platform without limits.
Why choose Magento? Magento is one of the world’s largest e-commerce brands due to its massive flexibility. Buyers in today’s market are changing habits and patterns every minute and being able to capitalize on these changes by adapting very quickly can mark the difference between businesses that sink or thrive. Magento is open-source, this means that customization is at users fingertips and enables such agility to take effect.
There are globally over 150,000 developers and innovators within their vast network of over 300 trained solution partners at your disposal and over 250,000 merchants around the world benefiting for the Magento solution. In addition, Magento helps to maximize sales by improving gross margin, reducing total cost of ownership as compared to many other competitive e-commerce platforms available.
On average, merchants using Magento have grown 3 times faster than those on other platforms realizing a 50% reduction in Total Cost of Ownership. Their motto is, rightfully, to “sell more, save more, do it faster”.
One of the major draws to Magento is its Marketplace featuring one of the most versatile offerings of customized extensions available. These extensions include automated mailer software, address, e-mail, and phone validation, and the list continues. Of course, having the option to enable these extensions allows for AvaTax integration taking this e-commerce suite to a whole new level of efficacy while keeping the door wide open for future innovation.
What People are saying about Avalara AvaTax
“What I like best about AvaTax is the accuracy of the taxing details. AvaTax can report different reports which allow me to get the best types of data required for different states.” – Barbara B.
“Once you have your products setup with tax codes and you get your customers setup with the appropriate tax exemption certificates, Avalara really does all the work for you.” – Renae B.
“I love the automatic calculation of the correct tax at the very instant of printing an invoice. This is an extraordinarily comfortable feeling. Now we only have to write one check at the end of each month and all of our tax filings are done correctly, and it is guaranteed.” – Bradley J.
“The ability that Avalara AvaTax has to manage sales tax reporting for multiple companies on a national basis is one of my favorite aspects of this integration.”- Mike P.
“AvaTax was easy to connect to Magento. I especially like that we do not have to be experts in sales tax for every state and county that we are selling in! The customer support has been incredible with prompt responses and extensive guidance in a variety of areas.” = Lee S.
Conclusions and Recommendations
Our overall assessment is that Avalara AvaTax delivers in both form and functionality. Specifically, the product provides a comfort level in knowing that taxes are being computed accurately and their service can also be used for filing tax returns as a bonus. Besides using AvaTax, a firm could consider hiring employees or temporary labor to assist and manage tax returns exclusively, the savings alone from utilizing their software over hiring additional support labor more than pays for itself.
In states like Illinois or California where the counties and jurisdiction along with regulations vary so extensively and are so complex, it is hard if not impossible to make the calculations manually, Avalara comes to the rescue with the definitive solutions to the complexity that is inherent in the system.
In addition, maintaining all the records and reports needed for filing tax returns is a major pain that companies no longer have to grapple with. From a cost perspective, this activity alone accounts for more than a quarter time person every month, equating to more money back in the bottom line.
Managing the tax rules, logging transactions, reporting sales tax across every possible jurisdiction in the United States is a task that alone can be met effortlessly and in less than one second per transaction (on average) time by AvaTax.
If you are looking to expand your business without expanding your overhead and headcount, AvaTax is the solution.
If you are looking to integrate AvaTax with Magento, get in touch with Full English today.