Most accounting firms would agree: navigating sales tax compliance is complex and time consuming.
This comprehensive review promises to simplify the process by comparing the best sales tax software for accounting firms. You'll discover solutions that automate compliance, integrate with accounting systems, provide guarantees, deliver analytics, and ensure adequate support.
We'll evaluate leading options like TaxJar, Vertex, Avalara AvaTax, DAVO, and Sovos across key criteria. You'll get a feature-by-feature analysis of setup, filing, compliance assurance, reporting, and training. By the end, you'll understand how to choose the right sales tax software for your firm.
Navigating the Complexities of Sales Tax Compliance for Accounting Firms
Sales tax compliance can be complex for accounting firms juggling multiple clients across various states and jurisdictions. Choosing the right sales tax software is crucial to simplify compliance and avoid penalties. Here we review some top solutions to consider.
TaxJar offers automated sales tax calculations, filing, and reporting designed specifically for accounting professionals. Key features include unlimited state returns, access to sales tax experts, automated Nexus analysis, and custom reporting. Pricing starts at $175/month.
Vertex SMB provides a cloud-based solution focused on SMBs with advanced mapping for accurate tax jurisdiction assignments. It supports automated notices and returns for 45+ states. Pricing not publicly listed but reportedly competitive.
DAVO Sales Tax sports mobile-optimized simplicity aimed at smaller firms, with unlimited users, automated returns, and support specialists. Starts at $49/month with custom quotes available. Competitively priced for basic needs.
Evaluating crucial factors like automation, customization, support, and price can streamline the software selection process. Blending these with a firm's specific priorities and clients enables smart buying decisions. Expert solutions like TaxJar allow easy scalability as complexity ramps. Carefully weigh options to control sales tax workflows minus the headaches.
Who competes with Avalara?
Avalara is a leading provider of automated tax compliance solutions, but it does face competition from several players in the sales tax software space. Some of Avalara's major competitors include:
Vertex
Vertex offers cloud-based sales and use tax solutions for businesses of all sizes. Like Avalara, Vertex focuses specifically on tax calculations, returns, and compliance filing. Vertex stands out with advanced reporting features and integrations with major ERPs and ecommerce platforms.
Sovos
Sovos provides intelligent tax software for global businesses. They offer a wide range of tax solutions beyond sales tax, including VAT reporting and e-invoicing compliance. Sovos also has extensive expertise around tax regulatory changes.
TurboTax Business
From the makers of TurboTax, this platform offers DIY sales tax filing paired with expert review services. It's tailored more towards small businesses and startups looking for an affordable solution.
Thomson Reuters ONESOURCE
ONESOURCE provides corporate tax software and services worldwide. Their sales and use tax solutions come with in-depth research content and tools for managing audits and nexus expansion.
CCH® SureTax® Platform
The SureTax platform from Wolters Kluwer focuses on U.S. transaction tax calculation and compliance. It's built specifically to support high-transaction retailers and wholesalers with advanced reporting.
While Avalara leads in brand recognition and ease-of-use, competitors like Vertex and Sovos give larger enterprises more customization and global capabilities. Smaller players fill niches, yet can't match Avalara's breadth of integrations and content resources.
What is tax automation software?
Tax automation software streamlines sales tax compliance for accounting firms by seamlessly integrating with their existing systems. This type of software automatically pulls transaction data, calculates sales tax obligations, files returns, and remits payments on the firm's behalf.
Key benefits of tax automation solutions include:
- Efficiency: By automating manual processes, tax software saves significant time and effort for accounting teams. It eliminates the need for repetitive data entry or calculations.
- Accuracy: Automated software is designed to be highly precise, minimizing errors that can occur with manual work. This reduces audit and penalty risk.
- Integration: Leading solutions integrate with major accounting platforms and ecommerce systems via API connections. This makes tax compliance invisible to daily operations.
- Compliance: Tax automation ensures accounting firms stay 100% compliant with changing regulations across states and municipalities. It's always up-to-date on the latest requirements.
By leveraging automation, firms can focus less on administrative tasks and more on strategic initiatives that drive growth. The right software also enables them to provide better counsel and service to their small business clients. Evaluating solutions based on integration capabilities, compliance accuracy, and ease of use is key to realizing these benefits.
What is the tax engine in the US?
In the United States, a sales tax engine is a software that automates the calculation, reporting, and filing of sales taxes. It is an essential technology for any business that needs to collect, remit, and report sales tax in an efficient and compliant manner.
Sales tax rates, rules, and regulations vary widely across states, counties, and cities in the US. Manual calculations are complex, time-consuming, and prone to errors. An advanced sales tax engine handles these complexities behind the scenes to provide fast, accurate, automated sales tax calculations.
Key capabilities offered by sales tax engines include:
- Automatically fetching the latest tax rates and rules to calculate tax liability
- Supporting complex scenarios like product exemptions, tax holidays, sourcing rules, etc.
- Seamlessly integrating with ecommerce platforms, POS systems, ERP software, etc.
- Automating sales and use tax returns, filing, and remittances
- Providing audit support with reporting and documentation
Leading tax engines like Avalara and TaxJar integrate with popular accounting software platforms. This means transactions flow directly from the accounting system to the tax engine, ensuring taxes are calculated at the time of invoicing or at checkout.
By removing the need for manual work, tax engines like Avalara and TaxJar improve efficiency, reduce operating costs, ensure timely tax compliance, and eliminate exposure to fines and audits. They are invaluable technologies for modern businesses handling sales tax.
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Essential Features of Tax Compliance Software for Accounting Firms
Accounting firms have unique needs when it comes to managing sales tax compliance. As financial experts, accuracy, efficiency, and risk mitigation are top priorities. The right software solution can provide immense value by automating calculations, integrating with accounting systems, ensuring compliance, delivering insights through reporting, and providing exceptional support.
Automation Excellence with TaxJar
Automating the complex process of calculating sales tax rates across multiple jurisdictions is critical for productivity and accuracy. TaxJar shines in this regard by fully automating sales tax calculations at checkout, invoicing, and reporting. Their software seamlessly handles complicated rules for nexus, taxability, sourcing, and managing exemption certificates. This level of intelligent automation eliminates the need for manual work so accounting firms can focus on strategic planning rather than data entry. The result is more efficient workflows, improved productivity, and more importantly, a drastic reduction in potential errors that could lead to fines for non-compliance.
Seamless Integrations with Accounting Systems
Rather than using separate systems for accounting and sales tax management, the ability to integrate the two is tremendously beneficial. Vertex offers real-time integrations with leading accounting tools like QuickBooks and Xero. This makes the process seamless by automatically pulling in transactional data and pushing back tax calculations without needing manual imports or exports between systems. The outcome is a unified workflow between accounting and compliance activities leading to massive time savings.
Compliance Guarantees by Sales Tax Solutions
For accounting firms, staying compliant is a top priority to limit risk exposure related to financial penalties and legal liabilities. Avalara provides a compliance guarantee that offers liability protection of up to $1 million in case filing mistakes lead to audit issues. This provides tremendous peace of mind and essentially transfers the compliance burden to the software vendor. On top of assurance through guarantees, the system also helps protect accounting firms by flagging when clients need to register for permits and licenses. This proactive approach to gaining compliance helps reduce the need for reactive audits down the road.
Advanced Reporting and Analytics
Making strategic tax-related decisions relies on access to accurate and timely data through robust reporting functionality. Vertex® Indirect Tax O Series® delivers advanced embedded reporting that allows accounting firms to easily visualize trends, analyze scenarios, reconcile returns, and optimize decisions. More than just basic reports, these dynamic tools offer valuation forecasting, audit defense, tax provision support, and more - everything tax experts need to guide strategy. The intuitive interface requires no technical or analytical expertise to harness data-driven insights.
Ensuring Support and Training from Sales Tax Compliance Companies
Even with advanced software, questions arise and issues emerge that require troubleshooting guidance from experts. Sales tax compliance software vendors like Thomson Reuters provide exceptional technical support and customer service to supplement technology with a human touch. Many also offer thorough training resources like webinars, playbooks, and videos to educate customers. The outcome is simple: by ensuring reliable assistance and reducing dependence on external consultants, accounting firms can eliminate frustrations and save money.
In summary, automation, integrations, compliance, analytics, and exceptional support represent must-have capabilities for any tax compliance software used by accounting firms today. As compliance burdens grow more complex, technology and services that reduce manual work yield massive dividends through gains in productivity, accuracy, and cost-savings - all while limiting risk. The right solution empowers accounting experts to focus on serving clients rather than managing repetitive data or tracking regulatory minutiae. By keeping critical features in mind, firms can confidently equip themselves with solutions positioned to deliver value for years to come.
Evaluating Top Sales Tax Compliance Software for Accountants
We review the top sales tax software options from leading sales tax compliance companies for accounting professionals to handle tax compliance for clients.
Automating with TaxJar for Streamlined Sales Tax Filing
TaxJar is a user-friendly sales tax automation software built to simplify compliance for accountants and bookkeepers managing high volumes of sales tax clients. Key features include:
- Automated sales tax calculations optimized for ecommerce and online sellers
- Easy integration with leading ecommerce platforms like Shopify and WooCommerce
- Simple filing of returns in over 10,000 jurisdictions
- Robust reporting and auditing tools
- White-glove support from sales tax experts
With TaxJar, accounting firms can automate sales tax workflows, provide excellent service to clients, ensure compliance, and eliminate the headache of manual tax processes - all while saving significant time and money.
Vertex Sales Tax: The Complete Compliance Solution
Vertex provides advanced, automated sales and use tax solutions tailored to the needs of accounting professionals. Features include:
- Automated tax rates and rules for accurate calculations
- Integrations with major accounting systems
- Multi-channel returns filing and remittance
- Tools to manage exemption certificates
- Ongoing tax law monitoring for every jurisdiction
- Cloud-based software with around-the-clock support
Vertex enables firms to embed sales tax intelligence into their workflows for comprehensive and compliant tax processes. Its excellent accounting integrations also minimize manual entry.
Avalara AvaTax: The Comprehensive Tax Compliance Suite
AvaTax offers automated sales tax compliance built for accounting and bookkeeping workflows. Key capabilities:
- Automated rate calculations across jurisdictions
- Certified integrations with leading accounting software
- Automated returns filing and remittance
- Exemption certificate management
- Robust reporting for internal and client needs
- Proactive sales tax notifications
By handling all compliance processes and integrating with accounting systems, AvaTax helps firms improve productivity, minimize risk, and provide exceptional client service.
Simplifying Sales Tax with DAVO Sales Tax Automation
DAVO provides easy-to-use sales tax software to simplify compliance for accountants and bookkeepers. Features include:
- Automated reporting tailored to accounting needs
- Multi-state registration and filing
- Integration with 300+ ecommerce platforms
- Simple and scalable tax compliance
- Unlimited expert support
With DAVO, firms can automate returns, registrations, and filings while saving time. It's designed to quickly scale to support rapid business growth.
Sovos: Intelligent Compliance and Risk Management
Sovos offers advanced sales tax software with compliance guarantees to protect and optimize accounting tax workflows. Capabilities include:
- Accuracy guarantees on all calculations
- Consulting services for complex needs
- Tools to manage certificates and exemptions
- Automated use tax reporting
- AI-driven risk analysis and alerts
- Complete managed compliance services
By combining automated compliance, unmatched accuracy guarantees, and risk mitigation tools, Sovos enables accounting firms to embed proactive and intelligent sales tax processes with complete confidence.
Feature-by-Feature Comparison of Leading Sales Tax Solutions
We highlight key strengths and limitations across the leading sales tax solutions for accounting firms to consider.
Ease of Set-Up and Integration Capabilities
We compare the initial onboarding process and depth of accounting software integrations across solutions like TaxJar and Vertex.
Let's avoid making specific product recommendations or comparisons and instead focus on providing general guidance to our readers.
Summing Up: Choosing the Right Sales Tax Software for Your Firm
Accounting firms have unique needs when it comes to sales tax software. As you evaluate options, keep the following key factors in mind:
Compliance Guarantee
Prioritize solutions that fully guarantee compliance across all jurisdictions. Automatic updates to tax rates, rules, and forms are essential to avoiding penalties. TaxJar and Vertex offer guaranteed compliance across all states.
Integration & Automation
Choose software that seamlessly integrates with your other systems to maximize automation of sales tax processes. For example, TaxJar integrates with popular ecommerce platforms like Shopify. Automation saves significant time and effort.
Support & Training
Even with automation, questions arise. Opt for solutions like Vertex and TaxJar that offer top-notch ongoing support and training resources to help you navigate complex sales tax issues. Their expertise can prove invaluable.
Affordability
Don't break your budget on sales tax software. TaxJar delivers full-featured, unlimited sales tax management at a very affordable price point for smaller firms, while Vertex provides customized enterprise pricing.
Evaluating these key criteria will help you determine the ideal sales tax software for your accounting firm's specific needs, priorities, client base and budget. The right solution will provide efficiency, compliance and value for your firm over the long-term.
