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Avalara AvaTax: Pros & Cons Of The Top Tax Compliance Software

avatMore than just another sales automation product, Avalara developed and introduced a powerful tax compliance solution, and recorded great success in a significantly short amount of time. From our own experience with the software we clearly see that AvaTax does genuinely respond to more taxation issues than most other calculators, being able to meet complex taxation needs regardless of where in the States you’ve established your business. It is indeed a complete solution and it covers compliance standards for each and every of your business transactions. In this article, we take a detailed look at Avalara AvaTax pros and cons to give you a good overview of what the app has to offer so you can decide if it’s a solution you can use in your company.

We had a very positive experience with Avalara AvaTax during our tests of their service and after analyzing its capabilities in more detail we found that it is indeed one of the current frontrunners in its category. 

Pricing for the app is also flexible making it accessible to a wide range of business types and sizes. There are no extra license costs and no additional maintenance expenses as well.

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But what is it that makes Avalara AvaTax so special? The challenging part here is to understand where to begin from. Let’s say that one of the biggest compliments you can give to a sales automation product is that it is an end-to-end solution. With this in mind, feel free to consider AvaTax as the very definition of end-to-end quality, because it is certainly one of the most comprehensive tax compliance suites you will have a chance to use.

AvaTax meets literally every US compliance standard, and makes use of various indicators to satisfy the needs of businesses of all scales and industries. Packed with immense functionality, the platform helps hundreds of prominent names save time and resources, and contributes to significantly smarter business decisions. If you’re wondering how this could happen, imagine a situation where your IT technicians are no longer burdened with a task to track taxation updates, or where the accountant doesn’t spend hours transferring numbers from the ERP system to the taxation spreadsheet. AvaTax takes calculation in its hands from the very first moment you set it up, and the best part about it is that it covers all 12,000 taxation jurisdictions around the USA.

In case you’re afraid you won’t be able to bundle it within your other software infrastructure, you can relax and take a look on a list of more than 500+ integrations with the most popular POS, ERP, and ecommerce systems on the market that AvaTax supports.

We are also impressed by AvaTax flexible pricing, as the quote based scheme allows customers to only pay for features they genuinely need, ensuring that the price will be tailored to their financial capacity and business scale. If you want to learn more about Avalara AvaTax features read on or check out our review of the software. Read on for a detailed analysis of Avalara AvaTax pros and cons. 

Key Advantages of Avalara AvaTax

Let’s take a deeper look at how the system actually reduces taxation burden. AvaTax offers a lot of features, so we will try to summarize them in a list of key points you should consider before making your purchase decision:

End-to-end calculations coverage

AvaTax allows you to actually leave the chaos of apps and charts behind you, as it seems to know exactly what you have to do, and will do it for you instead. You will no longer be supposed to upload rate tables and DOR manually, and you can easily deliver everything on time. Nexus will be set just once, and will update the rates for each transaction automatically, eliminating the chance of making common errors.

Precise reporting

AvaTax uses prebuilt address verification and geolocation algorithms that define the taxation rules which apply to your business, meaning that compliance will never be an issue. Once you’re in, your address is automatically validated, and the final rates are calculated in only a few minutes. The best part of this process is all payments are summarized in a single schedule, from where you can do transparent reporting using some of the outstanding categorization features the system has to offer. If interested, you can purchase tax-specific or international add-ons such as Avalara Returns, AvaTax Excise to widen the capabilities of the system.

500+ Integrations

This is definitely AvaTax’s strong point, because with so many integrations, odds are little you’d find the system inapplicable in any case. AvaTax was designed with the idea to blend with every software architecture, and functions seamlessly with all ERP, POS, e-commerce and CRM solutions we tested.

Protected data and automated maintenance

Once your data is entered to the system, there is almost no way to compromise it. The AvaTax team understands how sensitive your corporate data is, and subjects it to the highest security standard. At the same time, it spares you the trouble of going through expensive maintenance procedures, as it updates automatically. Once you’ve paid your license, you have no duties or obligations towards the company in terms of managing your own security.

A community and team of experts that is always there for you

To be completely honest, every vendor will promise something similar when trying to sell you on a product, but in case of AvaTax it genuinely goes that way. Being an incredibly user-friendly tool, AvaTax has already gained 20,000 customers ready to share their experience about the quality of support offered, and we also put it to the text with a very positive result. Despite of the fact that the tool allows you to manage your taxation schedule without professional assistance, a team of prominent technicians will always available on email/phone to do whatever necessary to help you out. Checking the community is also an excellent idea, because you can familiarize with the best practices related to the system itself or online taxation in general. We found the community to be very useful in that regard.

Disadvantages of Avalara AvaTax

Following the development of the product and considering their future plans, there are almost no issues to be classified as disadvantages, since the product genuinely works in all aspects expected of it. The glitches are minor and don’t disrupt the workflow in any way. Here are some areas for improvement, though:

The software lacks freelance-friendly tax preparation features. Due the fact that AvaTax was designed for companies, this idea was probably not considered in advance.

No fixed payment rates for various business types, and promotions for beneficiary organizations. For what we know, the company has considered the idea, but decided customer’s opinion was still too divided between fixed and quote-based payment. Besides, they seem to believe it is easier to meet start-up needs with quote-calculated payment.

Daniel Epstein

By Daniel Epstein

Daniel Epstein is a senior financial research analyst at FinancesOnline and the architect behind our Fintech and ERP content division. His main areas of expertise are blockchain technologies, cryptocurrencies, and the use of biometrics in fintech solutions. His work has been frequently quoted by such publications as Forbes, USA Today, Entrepreneur, and LA Times. With more than 1,800 solutions scrutinized in the last 5 years spent on our team he always prioritized offering readers an unbiased perspective on modern financial technologies.

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