How to Have a Successful Avalara Implementation

It's go-time once you sign on the dotted line with Avalara. Your clock is ticking, and Avalara is an annual contract. This means you have no time to waste installing and going live if you want to get the maximum benefit of your Avalara. Here are some things that could help with your Avalara implementation:

Tax Group Codes

These are a fundamental element of any tax implementation and can make or break your items' taxability. If you do nothing, the default tax code is P0000000 or some amount of zeros. This is fine if you sell something that is always taxable everywhere and every time, or most of your customers are exempt from tax, and you’re unlikely ever to charge tax.

Tax codes are complicated; let’s take dog treats as an example. This one seems easy and taxable. You’d be incorrect; dog treats are not taxable in Texas. Why? I don’t know.

This can also be a significant delay in your go-live.

You can do the research yourself at: https://taxcode.avatax.avalara.com

Or if you have complex taxing scenarios, especially in software, it is best to consult with an outside firm such as TaxOps, Sales Tax & More, Peisner Johnson, or the Sales Tax Institute. Judy, Michael, Andrew, and Diane did not pay me for the referral, but I’ve known all of them for years and cannot speak highly enough about them and the service they provide. Also, not all CPAs are created equal; your tax accountant might be great at finding deductions from the IRS, but that doesn’t mean they can do tax codes. It is the same for your audit firm or if you have a general CPA; in this matter, you want someone who knows these codes. There are a few firms that are more “Big 4” types that do offer this service as well. With tax, first, it’s illegal to overcharge; second, if you undercharge, you will pay the tax bill. Correct codes are the first step to achieving your sales tax-compliant dreams. In other words, the additional cost of having the correct tax codes is a good investment.

Time/Be Prepared

You will be immediately asked for information about the states you are nexus in. You’ll want to return this ASAP; not much else can go on without it. If you’re going with ECM Pro, you’ll also need a customer list.

Not to mention, you are going to need to test!

While overall, in the right hands, Avalara is a low-key implementation, you still want to test this. That means you’re going to need time. If someone is already working 40+ hour weeks and hasn’t seen their family in a month, the last thing they want to do is test a sales tax system. I can tell you now that their UAT results are either failed, with no elaboration or passed – and there’s one test order.

The more viral saying about work these days is people “act their wage,” which isn’t to be confused with quiet quitting. This means the days when people did anything for the job are gone; make sure the people in charge of this project have the time and the resources to have work/life balance, their day-to-day job, and testing of this new ISV. As an accountant, I can appreciate there is never that good of a time to do something new/different, but once this is in place, it will save time. I call it a small upfront sacrifice for a long-term time gain.

Other Integrations

If you have a resale site like Shopify or Magento or a B2B portal like Sana, you will need to think ahead on these systems. Mostly, you also want these systems on Avalara. Be careful; sometimes, one of these systems might already be on Avalara, and now you have two Avalara accounts. It’s painful to merge these and take a long time, so check ahead.

There might be changes to how these speak with your operating system when everyone runs the accounting software. You don’t want to double down on tax accruals or reporting or forget about them and wonder why things are not getting taxed. Also, in this case, your e-commerce people and accounting will be mixing; this will be new and different. Please don’t leave the e-commerce people off the project; they hate that.

Trusted Implementor

Like CPA firms and tax group codes, implementers are not all the same.

Avalara will charge you a flat fee of around $16,000, which only covers the Avatax build. I won’t lie to you either; sometimes this has a 6+ month lead time to get started…so your bill will start later, right? No, once you sign, you’re now billing.

You can go with your partner, but not all partners have a certified implementer – which means they can only do the BC side but not the Avatax side. I’ve seen partners also fail at Avalara implementations; if it’s not something they do a lot of or have had experience in, it’s an easy failure or can cost you a lot of hours while they fix things they may have broken.

If you need someone to help you achieve your Avalara installation with a white glove approach, contact me at consulting@riviezzo.net. Not only should I do it faster and at less cost than Avalara or your partner, but I might be able to save you money on your Avalara quote. Sometimes, that savings is more than my cost of implementation (also a fun money-saving tip).