Avalara can be a highly valued solution for any company in managing sales tax assessment and remittance. I’m a fan! An area of recommendation here is to NOT commit invoice records or credit memos at creation, but audit the list of records and compare them between ConnectWise Manage and the AvaTax portal as your tax review and filing process. Reason being, a “committed” record cannot be edited. If a record cannot be edited, the original creator is highly likely going to change the invoice number to something new (or add a .1 or .2 after it) creating duplicate sales and liability in AvaTax. Now, if the invoice list is not audited for any diplicatations prior to remittance, the Company will likely be remitting more in tax liability then it is collecting and reporting more in sales then it is actually selling. There has not been one month where I have audited for my customers and not found records that needed to be voided, which can add up to hundreds or thousand of dollars. NOTABLE: AvaTax does not process filing based on uncommitted records, so it would be important to schedule that audit/review process on time.

Even prior to implementing Avalara, it has always been important to consider the period within which an Invoice was being “revised” vs. a Credit Memo being created. Invoices revised from a previous tax filed period will not be able to be edited in AvaTax as the record is “locked”. There could be occasion to re-open a record just to add a Purchase Order number that was missed from a previous period without any other financial impact; however, AvaTax will disallow that record from being re-closed, so a ".1" would be recommended for visibility so that it can be voided at audit. Where there is a financial impact where product or service is increased or decreased, it is recommended that a Credit Memo (for the whole or part) utilizing the original Invoice No. with a CM appended to it; be created within the current period and a new Invoice record created. This should provide a net difference that is accurate for filing.

Previously, Nexus had been determined by several factors, not limited to, having an office or warehouse location within a State or having employees reside within a specific State. More recently, an “economic nexus” has been added to this list. The basis of economic nexus includes total sales volume within a State or the number of sales transactions, regardless of their total. What this means is that there are likely many more States where Companies should voluntarily enroll, collect and remit sales tax and no longer invoice based on “out of state”.