Below, we’ll explore the reasons you might be looking for an alternative to Avalara, the best competitor solutions for specific kinds of businesses, and dive into some frequently asked questions about Avalara. Let’s get started!
7 Reasons You're Probably Looking for an Avalara Alternative
Final Thoughts on Avalara Alternatives
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Choosing the right tax compliance software is crucial for your business's financial health and operational efficiency. If you're on the hunt for an Avalara alternative, you're not alone. Many companies find themselves reconsidering their options for various reasons, ranging from service coverage to cost transparency.
Setting up and integrating Avalara with your existing systems can be a daunting task that requires sophisticated knowledge and time for constant maintenance. The complexities of the software’s interface and the lack of one-on-one support exacerbate the challenge, making it a recurring task that demands constant attention. There’s also a high cost with integrating your business systems with Avalara’s software, which can hinder your ability to migrate to better solutions and inadvertently tie you to Avalara’s system due to the sheer investment of time and money needed for integration.
Many businesses turn to sales tax software like Avalara to eliminate the hassle of sales tax, only later to discover how much work is required to maintain it each month. In addition, there’s a whole bunch of things that the software doesn’t manage for you that are critical to address if you’re going to minimize liabilities under a sales tax audit. Some of the things that are not included in Avalara’s sales tax software include:
This list is just scratching the surface of all the things Avalara’s sales tax software doesn’t include that you’ll still need to handle yourself. This is where an all-inclusive sales tax service comes in handy – more on that in a bit.
While Avalara offers sales tax calculation and sales tax filing assistance, it falls short of taking on the full liability in the event of a sales tax audit. This means the responsibility for any discrepancies falls squarely on your business, increasing the pressure to ensure that your sales tax systems are set up and managed correctly on an ongoing basis. The sales tax risk is significant, given the severe penalties for tax compliance failures, not to mention the additional workload of managing separate platforms to import sales data into Avalara.
Avalara is a tool that your business can use to save time with filings, but its sales tax filing software doesn’t handle all the things that are necessary to truly eliminate sales tax risk. Some key things that are missing include comprehensive nexus analysis, product taxability support, and tax setting set-up and maintenance. Avalara does provide some of these services through their managed services department, however, this is not included in their software and is considered extremely expensive by most businesses.
Note that Avalara does provide an accuracy guarantee for their software, but this requires that you have set it up correctly for your business. There are many reasons why you could owe money under a sales tax audit that the software won’t catch.
The cost of using Avalara can be a point of contention for many businesses. The pricing structure is often perceived as complicated and opaque, with hidden costs that come as a surprise. This lack of clarity in pricing can be a significant barrier, especially for businesses that need to plan their finances meticulously and expect predictable expenses without the fear of unforeseen charges. Some businesses have also complained that they’re locked into a long-term contract which makes it impossible to leave without paying high termination fees.
Even though Avalara has more sales tax integrations than any other sales tax software, there are still numerous integrations that Avalara doesn’t support. This means that Avalara will require significant manual work to handle sales tax filings. This can be time-consuming and prone to errors. Businesses may need to look for an alternative solution that provides end-to-end sales tax filing support with seamless data connections.
Most Avalara users will only have access to e-mail support and a customer knowledge base to resolve issues with using the software. Phone support can be added for an additional fee, but many consider the cost unjustifiable. Whenever you have an issue and need to contact support, you’ll be assigned to a different representative who doesn’t know your business’s unique situation and setup, which means that it can take a long time to resolve your problem. This is problematic because if an issue isn’t addressed, you’re risking sales tax returns being filed and paid late which can result in high amounts of penalties and interest.
Avalara is widely known for its high price, but it is difficult to compare pricing with other solutions because they don’t make their pricing available to the public. The amount you pay for Avalara will be based on a variety of factors such as how many transactions you have each year, and which sales channels you sell on. We’ve seen some businesses paying over $100,000 per year for Avalara, and that’s just for the live tax rate calculation alone. Many businesses have found that Avalara’s price is just too high considering that it is a DIY solution that still needs to be managed in-house.
Vertex provides fully integrated sales and use tax solutions tailored for complex, global enterprises across multiple industries. Vertex offers automated tax calculations, returns, and exemption certificate management powered by precise tax content databases. Large corporations can consolidate transaction data from multiple systems and handle multinational product taxability with Vertex. Vertex is primarily focused on enterprise accounts and is an excellent solution for Fortune 500 companies. Vertex’s software is extremely flexible and can support high levels of complexity.
One downside of Vertex is that implementation requires significant involvement with subject matter experts and IT departments. You’ll likely need an internal tax department that’s trained to manage its feature-rich software. Vertex also does not have as many integrations as Avalara.
Many companies turn to software to automate sales tax filings and payments, only to later realize how much time and expertise is required to manage sales tax on an ongoing basis. This is where working with an all-inclusive sales tax service like TaxValet shines. With TaxValet, you’ll get a dedicated sales tax accountant and a team of trusted advisors who’ll manage all of your sales tax each month and provide industry-leading customer support.
TaxValet is a great fit for businesses that never want to deal with sales tax again. Here’s an overview of what’s included:
One potential drawback of TaxValet is that they don’t provide services to businesses doing less than $1M/year in revenue, and they don’t provide an online app for you to log in to. Instead, you’ll be assigned a dedicated sales tax accountant who provides you with concierge support (phone, Zoom, and email support) for all of your sales tax needs.
TaxJar is a sales tax software solution built for small businesses and startups that are looking for a no-frills automated sales tax filing solution. TaxJar automates sales tax calculations, filings, and payments for top ecommerce platforms and is generally known for its ease of use.
However, not everyone is happy with TaxJar’s sales tax solution. Here are some common complaints about TaxJar based on online reviews:
Sales Tax DataLINK is the only comprehensive sales tax solution in the marketplace that specifically addresses the needs of manufacturers. Finding a sales tax solution that will work for your manufacturing business can be particularly challenging because of the additional compliance requirements manufacturers face. As a manufacturer, you’ll need a solution that can provide support for manufacturing exemptions, with a particular focus on remitting use tax for certain purchases. But they don’t just help manufacturers, they also specialize in sales tax services for construction and contracting companies.
With Sales Tax DataLINK, you’re not just getting sales tax software to automate tax calculations and filings. You’ll get a personal sales tax concierge located in Arkansas who can assist your manufacturing business with setup, filings, registrations, exemption management, Voluntary Disclosure Agreements (VDAs), gross receipts tax, and more.
TaxConnex offers mid-market businesses an outsourced sales tax department that can handle all of your sales tax needs. TaxConnex is widely recognized for its expertise in the telecommunications industry which has a high degree of sales tax complexity and risk associated with it. One potential drawback for TaxConnex is that their service only includes 2 hours of ad-hoc sales tax support per month beyond routine sales tax work, and they charge extra for additional hours of support.
Finding an ecommerce sales tax provider can be particularly challenging because very few software solutions provide complete coverage for all of your sales tax needs. This is where TaxValet shines because it provides an affordable all-inclusive solution with deep ecommerce industry expertise.
TaxValet is a great fit for businesses that never want to deal with sales tax again. Here’s an overview of what’s included:
One potential drawback of TaxValet is that they don’t provide services to businesses doing less than $1M/year in revenue, and they don’t provide an online app for you to log in to. Instead, you’ll be assigned a dedicated sales tax accountant who provides you with concierge support (phone, Zoom, and email support) for all of your sales tax needs.
Anrok is a relatively new player in the sales tax software space that focuses on handling sales tax specifically for Software-as-a-Service (SaaS) companies. They offer integrations with common accounting systems and can automate sales tax calculations and sales tax filings for software companies. They have several unique features built specifically for SaaS companies which make them stand out. Anrok can also handle VAT registrations and filings for international tax compliance.
The downside to Anrok is still a Do-it-Yourself solution which means you’ll still be responsible for overseeing the software each month. That being said, Anrok does have some great quality-of-life features such as economic nexus monitoring, and sales tax permit registration.
DAVO’s software was built specifically for retail businesses to manage sales tax for brands with in-store sales. DAVO automates sales tax calculations and reporting based on store locations and integrates directly with popular POS hardware and accessories. Calling DAVO an alternative to Avalara isn’t accurate, though, since Avalara purchased DAVO Technologies in 2021. However, DAVO’s sales tax software is a distinct and separate app from Avalara.
Key features for DAVO’s retail sales tax solution include:
Downsides of DAVO include that it is not a comprehensive solution that handles all aspects of your sales tax such as managing audits for you, managing sales tax permit registrations, or examining whether the products you sell are taxable. If you decide to go with DAVO, you’ll benefit from working with a trusted sales tax consultant, at least for the initial setup.
Cherry Bekaert is a top accounting firm that is an excellent alternative to middle-market and larger companies with complex tax needs. They provide customized solutions tailored to a wide array of industries and business types. Their team is composed of highly credentialed professionals, including those with advanced degrees in law and taxation. They provide thorough tax preparation and compliance, audit representation, and up-to-date advisory on tax law changes. One advantage of working with Cherry Bekaert is that they can provide support for more than just sales tax and offer comprehensive solutions for a variety of tax and advisory needs.
Downsides of Cherry Bekaert include that they only service mid-market and larger clients, are at a high price point, and are less suited for simple tax needs.
TaxValet’s sales tax service completely takes sales tax off your plate so that you’ll never have to deal with it again. TaxValet’s comprehensive service takes the hassle, stress, and risk out of sales tax by handling everything for you from start to finish. TaxValet’s service includes everything you need for one simple all-inclusive price.
TaxValet is a great fit for businesses that are looking for comprehensive sales tax services and excellent customer service. Here’s an overview of what’s included:
One potential drawback of TaxValet is that they don’t provide services to businesses doing less than $1M/year in revenue, and they don’t provide an online app for you to log in to. Instead, you’ll be assigned a dedicated sales tax accountant who provides you with concierge support (phone, Zoom, and email support) for all of your sales tax needs.
After exploring the different Avalara alternatives for sales tax compliance, it’s clear there isn’t a one-size-fits-all solution. While Avalara can be a good fit for large businesses with an internal sales tax department, there are better options.
At TaxValet, we offer clients an experienced and dedicated team, timely legislative alerts, comprehensive sales tax services, and full software integration so you can focus on building your business. From setting up accounts and filing for permits to cleaning up data and managing audits, we pride ourselves on addressing every single aspect of sales tax for our clients.
If you’re tired of managing sales tax on your own, schedule a free sales tax review with our team and see the difference for yourself.
The pros of Avalara’s sales tax software are:
The cons of Avalara’s sales tax software are:
Avalara’s automated sales tax services are best suited for medium to large companies that have an in-house tax compliance team to handle integration and management. Avalara can also be a good choice for businesses that only can use one of their supported integrations, and the integration works out of the box with their existing setup.
Avalara could be a good fit for ecommerce companies that are mid-market or enterprise and have their own internal sales tax department. Companies of this size will need adequate personnel who can set up and manage Avalara’s complex software on an ongoing basis. Avalara is not recommended for smaller ecommerce businesses doing less than $50M/yr in revenue. Services like TaxValet, or sales tax software like TaxJar might be a better fit for these companies.
Avalara can be a good solution for Software-as-a-Service (SaaS) companies that have in-house expertise and can manage Avalara’s complex set-up and ongoing maintenance. However, SaaS companies should consider a more all-inclusive solution, like TaxValet or Anrok, whose solutions are custom-tailored to work with SaaS businesses.
Avalara is not known for having excellent customer support and is frequently criticized for taking a long time to respond or resolve an issue. Plans don’t include dedicated phone support unless you are paying an additional fee. Avalara does have fairly thorough self-service documentation in its online support portal. However, an ideal sales tax solution would require little, if any, of your or your team’s time on an ongoing basis.
Avalara’s pricing is not available to the public and is highly dependent on a variety of factors including which integrations you’re connecting with. In general, your price is going to be based on your sales tax return filing frequency and your transaction volume. If you are paying for live sales tax rate calculation, you will be limited to a transaction limit. If you go over that limit, you’ll be paying overage fees.
Avalara does not manage audits on your behalf as part of its sales tax software plan. Avalara does have a managed professional services department where you can pay hourly for assistance with things like audits, nexus reviews, product taxability, and tax-setting support. However, many businesses experience Avalara’s pricing for these services as high. This is where working with an all-inclusive sales tax service that already includes these things can be beneficial.