Organizations doing business online face a number of challenges--one of the biggest is taxes. Integrating Avalara with Dynamics AX helps companies tackle the sales nexus taxes and ongoing challenges without significantly increasing their costs.
Microsoft Dynamics is one of the leading ERP solutions for organizations in the manufacturing, services, financial, and retail sectors. The ERP consolidates human resources, financial, and operations management into one solution, enabling employees to be more efficient and productive.
However, while Dynamics AX has robust financial modules, organizations operating in different states struggle with reporting sales tax. Entering the different sales tax codes and generating tax records for different jurisdictions is a tedious and time consuming process.
However, organizations can opt to automate sales tax nexus by integrating Dynamics AX with Avalara. With integration, employees can automatically generate sales tax rates and jurisdictions assignments. This automation ensures organizations comply with sales and tax regulations in the states where they operate.
Benefits of Integrating Avalara with Dynamics AX
For medium-sized and large companies operating in different states, managing taxes is usually a complex and time consuming process. There may be different sales taxes and regulations in the various states and jurisdictions in which the organization may be doing business. These different taxes make work difficult and confusing for the organization’s tax department.
To reduce errors that are likely to result from computing sales taxes manually, companies need a system that can help them manage and automate sales tax nexus issues. The system should also be fast and accurate to help organizations keep their costs down. This is where Avalara comes in.
Avalara automates the process of dealing with sales tax, enabling companies to save time and human resources. The application handles everything; from calculating the right amount of online sales and invoices to electronic filing and payment. On integration, employees can accomplish all these functions from the AX dashboard.
Overview of Avalara
Avalara is comprised of three parts that are bundled into one product: AvaTax Calc, AvaTax Cert and AvaTax Returns. The Calc module is for calculating tax, the Cert module is for storing certificates, and the Returns module is for completing the forms and returning them.
Organizations using Microsoft Dynamics AX can integrate Avalara to ensure accurate sales tax calculation on demand. Apart from this, integration enables companies to have accurate reporting, exemption certifications, payments, and compliance. Avalara also has a robust API that makes it easy to integrate it with custom applications the organization may already be using.
States have been increasing their taxes to raise more revenues. Over the last five years, many states have been increasing enforcement efforts to maximize the tax yield. Businesses that fail to comply with state tax regulations risk huge penalties and other ramifications that may affect their operations.
Rising Cost of Compliance
Organizations doing business in multiple states have a difficult time managing and complying with taxes in the various jurisdictions. Staying compliant with the tax codes of every state is complex and time-consuming.
According to the Sales & Use Tax: Cost of Compliance at a Glance (PDF) report published by Aberdeen Group, small and medium-sized businesses spend about $21,896 annually in compliance costs. The figure rises to $42,106 for larger enterprises with annual revenues of more than $50 million. The costs are incurred in the time it takes to file and remit sales taxes, manage exemption certificates, and calculate sales taxes.
Sales tax has become a business risk for organizations doing business in multiple states. Because of the complexity of the taxes and increasing enforcement, companies risk an audit, which can mean huge fines, interests, or penalties in cases of non-compliance. Without automated record keeping and compliance measures in place, an audit becomes a laborious and expensive process.
Avalara AvaTax can tackle state-by-state taxes quickly, easily, and accurately. Compared to similar solutions on the market, AvaTax provides the best solution at the best price. Integrating AvaTax into Microsoft Dynamics AX takes the guesswork out of sales tax collection, payment, and reporting.
The accuracy brought about by AvaTax is impressive. Unlike other solutions, AvaTax breaks sales tax, reporting, and related functions into specific jurisdictions and target areas. Organizations can improve efficiency and accuracy in tax reporting by using Avalara AvaTax.