Sales tax compliance provider Avalara has partnered with small-business accounting platform Xero to help small businesses simplify sales tax calculations, reporting, and filing. With more than 13,000 sales and use tax jurisdictions in the US alone, this integrated solution will help streamline sales tax workflows and management directly into the Xero platform.
Automation of sales tax compliance can greatly benefit small businesses
Avalara, a G2 leader in both Sales Tax & VAT Compliance and Corporate Tax, announced on August 24 that they would partner with Xero, a leader in G2’s Accounting category. They aspire to provide small businesses, accountants, and bookkeepers with a new sales tax automation solution. The overall goal of this partnership is to introduce advanced sales tax management and workflows directly into Xero’s system.
Due to the thousands of tax jurisdictions in the US alone, a recent report found that a small business of five employees spends an average of 163 hours, or over 4 work days per person, just on sales tax compliance. Automating this process allows small businesses to manage the calculation and reporting of sales taxes more easily, including changing tax rates and rules and e-filing options. Xero’s accounting functionality can then allow the correct taxes to be applied to invoices, while also running detailed reports.
Avalara has already received sign-ups for closed-beta trials, which will be available next year to a limited number of users.
The importance of tax automation for small businesses
Most small businesses don’t employ tax experts. Therefore, automating tax processing will enable these businesses to improve accuracy and better assess tax liabilities. Automation is also important for small businesses to keep track of tax requirements, which vary across jurisdictions. For example, a company might be taxed on property, income, and capital gains, which would be extremely difficult to keep track of without the help of tax automation software.
Like most businesses, small ones face a double challenge—they must ensure they accurately collect, calculate, and report taxes while also staying compliant with all relevant laws and regulations. Automating the tax processes can be beneficial for ensuring compliance, managing business taxes, reducing errors, and improving reporting.
Sales Tax & VAT Compliance on G2
As the tax compliance world becomes more complex, companies of all sizes can benefit from tax automation software, and chances are there’s a platform right for each and every one of them in G2’s Sales Tax & VAT Compliance category. With nearly 50 products to choose from, that can be sorted by company size, specialty (sales tax, VAT, GST), languages supported, pricing, and G2 ranking (to name a few), an organization of any size can find software that will benefit them the most.
Nathan is a Senior Research Analyst at G2 focusing on finance and accounting software and their respective markets. Coming from the world of finance, Nathan understands and is familiar with the importance of finance/accounting software, and the complexities, struggles, and nuances that come with them. He has over 15 years of analytical experience in industries ranging from health care and transportation logistics to food service and software. Nathan received his MBA in finance and international business administration from the University of Illinois, Chicago, and his B.S. in production and operations management from California State University, Chico.