NetSuite users can wave goodbye to manual and tedious tax calculations and compliance.
Integrating Avalara into your NetSuite ERP software simplifies your sales and use tax management while reducing audit risk.Â
Avalara automates tax calculations, manages taxability rules, and verifies addresses. This translates to less time spent managing complex tax calculations and more time to focus on your bottom-line revenue.
Let’s explore how Avalara and NetSuite work together to streamline tax management, including Avalara’s key components, the implementation process, and the benefits of reducing audit risk and ensuring compliance.
What We’ll Cover:
- How the Avalara-NetSuite integration simplifies tax management and provides accurate calculations while reducing audit risk & overhead.
- Key components including AvaTax Integration & address validation/geolocation tech.
- How a streamlined filing process saves time & money while minimizing compliance risk.
What is Avalara?
Avalara is a cloud-based compliance solution provider that automates tax compliance processes, eliminating manual and complex methods while ensuring accuracy. It integrates with NetSuite to handle consumer sales and use tax, offering fully integrated tax returns, and certificate management. It supports all versions of NetSuite, making it convenient, easy, and affordable.
As part of your Avalara integration, you’ll have access to AvaTax. AvaTax is a tax compliance software offering automated, cloud-based solutions for transaction tax compliance, including sales and use, VAT, GST, excise, communications, lodging, and other tax types.
What to Expect From Your Avalara & NetSuite Integration
Integrating Avalara into NetSuite is all about combining the capabilities of NetSuite's ERP platform with Avalara's tax compliance software.Â
Here's an overview of how the integration typically plays out:
Configuration
After integration, you customize the settings to meet your business’s specific tax needs. You can map out the taxability of your products and services, set up the tax jurisdictions where you have nexus (tax obligation), and configure other specific rules.
Transaction Processing
When a transaction is made on the NetSuite platform (e.g., a sale), information about the transaction is automatically sent to Avalara AvaTax. This includes the product/service sold, the customer's location, and the selling price.
Sales Tax Calculation
AvaTax calculates the correct sales tax based on the transaction details and the latest tax regulations in the jurisdiction where the sale is made. This calculation considers sourcing rules, product taxability, exemptions, tax holidays, etc.
Tax Returns
AvaTax keeps track of all the sales tax collected and can automate the tax return process. Businesses can generate prepopulated tax forms for various jurisdictions and file them directly through the software.
Audit Trails
The software also maintains records of all transactions and tax calculations, providing a solid audit trail in case of any tax inquiries or audits from authorities.
Benefits of Integration
Integrating Avalara and NetSuite offers a host of benefits, including:Â
- Reduce returned shipments with precise address verification
- Get the correct sales tax for your customers across all selling channels
- Manage exemptions certifications with fewer clicks
- Reduce audit risk with automated tax-exempt certificate notifications
- Tackle use tax with ease
- Manage taxability rules for your entire product catalog
By automating complex processes, the integration ensures accuracy and adherence to tax regulations, minimizing the likelihood of audits. Even better, Avalara allows your business to adapt to the complex process of changing tax requirements as it grows.
Address Verification and Geolocation
One of the key features of Avalara is its address validation, which uses geolocation and address verification to calculate sales tax down to a specific address accurately.Â
This ensures that the right tax is applied to each transaction, avoiding errors and penalties. With Avalara’s address verification and geolocation features, businesses can be confident that their tax calculations are accurate and compliant.
Key Components of Avalara-NetSuite Integration
Avalara automates sales and use tax calculations, ensuring accuracy and compliance. With this integration, Avalara and NetSuite work together to manage multiple tax jurisdictions, exemption certificates, and various tax types to help businesses stay compliant with ease.
Tax Jurisdictions
Tax jurisdictions refer to legally defined areas, such as cities, states, municipalities, counties, and countries, that have their own distinct tax regulations.Â
When you integrate Avalara with NetSuite, you activate a comprehensive solution for managing multiple tax jurisdictions, accurately calculating the applicable tax rate for each jurisdiction.
Say goodbye to manual tax calculations.
Exemption Certificates
Exemption certificates are official documents that enable individuals or organizations to make tax-exempt purchases of taxable goods or services. Avalara has a system in place to ensure that tax is automatically omitted from exempt sales and manages the exemption documentation.
Tax Types
Avalara supports a wide range of tax types, making it suitable for businesses with diverse tax requirements. Taxes are classified into various categories: income tax, sales tax, property tax, corporate tax, capital gains tax, inheritance tax, and payroll tax.
Implementing Avalara: Quick Overview
The Avalara Connector seamlessly integrates Avalara AvaTax with NetSuite to easily calculate sales and use tax for transactions, invoices, and other activities.Â
The implementation process can be broken down into nine steps:
- Install the Avalara Connector for NetSuite bundle
- Connect NetSuite with AvaTax
- Configure NetSuite’s settings for AvaTax
- Map tax codes to your products and services
- Manage customer exemptions
- Validate customer addresses
- Apply AvaTax tax codes to customers
- Test Avalara Connector for NetSuite
- Correct any errors from the test
Reduce Audit Risk and Ensure Compliance
When you integrate Avalara into NetSuite, you’re taking a step toward reducing audit risk and ensuring compliance. Here’s how:
Accurate Tax Calculations
Utilizing Avalara, you automatically calculate the appropriate tax rate for each jurisdiction and eliminate the need for manual calculations. This minimizes potential errors and guarantees compliance with all applicable tax laws.
By maintaining up-to-date exemption certificates and providing alerts when certificates expire or become invalid at the time of sale, Avalara helps businesses reduce audit risk with ease.
Streamlined Tax Filing
The process of filing taxes is simplified and more cost-effective with Avalara.
Traditionally, it involves filing several years of amended or delinquent tax returns and/or international information returns. The Avalara-NetSuite integration automates this process, saving businesses time and money and ensuring compliance with tax regulations.
By leveraging streamlined tax filing, businesses can minimize the risk of errors or omissions in the filing process, avoiding penalties or other legal issues.
Simplify Your Tax Compliance with Avalara and NetSuite
Integrating Avalara with NetSuite is a game-changer for businesses seeking to simplify tax management and ensure compliance. This powerful integration reduces audit risk and streamlines tax filing processes by automating tax calculations, managing taxability rules, and verifying addresses.
Want to learn more about what a NetSuite integration with Avalara can do for your business?
Get in touch with a member of the StratusGreen team. We’re an Avalara partner and NetSuite Solution Provider with industry experts passionate about helping your business grow rapidly.
