If your business operates online, you could find yourself owing sales tax in states across the country. This is true both for e-commerce sites and those offering software as a service -- especially as a growing number of states move to tax software.
Managing the process of filing and paying taxes in multiple jurisdictions can be complicated, but there are software tools to help.
Avalara and Anrok are two of those tools. Each offers helpful features, including nexus tracking to determine when you hit the threshold where you must pay taxes, as well as tax calculators and tools to file tax forms and remit your payment.
However, there are important differences -- and pros and cons to both software solutions. This guide will help you decide which program is best for you to make sales tax compliance a breeze.
What is Avalara?
Avalara provides cloud-based tax compliance solutions for businesses operating in the government space and the public sector. It caters to companies across various industries, including retail SaaS, ecommerce, manufacturing, accounting, hospitality, short-term rentals, communications, supply chain, and logistics.
Avalara's software is full-featured but can be more complicated to use than some competitors, including Anrok, so be prepared for a steeper learning curve if you sign up. Plus, while prices are competitive for basic services, filing in multiple states or taking advantage of added features, including automated return filing, causes costs to climb quickly.
Key Features
Avalara aims to make sales and use tax compliance simple by helping you determine when you'll owe tax and managing filing and remittance on your behalf. Here are some of the key features you can expect when using the software program:
- Sales Tax Compliance: Avalara can automate every step of the tax compliance process, from determining what states you must file taxes in to calculating taxes and remitting payments. You can choose which specific services you want to take advantage of, but keep in mind that costs go up for each state you file in, as well as for features like automated filing.
- Nexus Tracking: It's simple to see when you're approaching your economic nexus threshold with Avalara's helpful tools. You can view an in-depth evaluation of both economic and physical nexus obligations and receive alerts in real-time if you're approaching the economic nexus in a new jurisdiction.
- Sales Tax Calculation: Avalara ensures the utmost in accuracy when calculating state and local tax rates by using an address-based system rather than just performing the calculation based on zip code. The software also automates the process of applying the correct tax code to each individual product sold to ensure that you're always charging the correct rate.
- Filing and Remittance: Avalara can prepare your tax reports for you while verifying information across multiple sales platforms to ensure accuracy. For an additional fee, you can also automate the filing process. You have the option to consolidate all of your tax payments into a single deposit for simplicity and Avalara will remit the correct payments by the deadline in each jurisdiction.
- Exception Certificate Management: Easily keep all of your exemption certificates in one place by uploading them to Avalara via email, photo,or scan. When Avalara detects that a certificate is present it will automatically exempt sales taxes. Avalara will also manage certificate renewals, streamlining the process.
Available Integrations
Avalara works with most online sales platforms and accounting software, with more than 1,200 pre-built integrations. This is more than many competitors offer. Examples of available integrations include:
- Shopify
- Salesforce
- Sage
- eBay
- Stripe
- Amazon
- Etsy
- Wordpress
Avalara also offers powerful API solutions so you can design your own integrations if you need one that's not on offer.
Who is Avalara Best For?
If you work within one of the many industries Avalara is focused on and you don't mind a bit of a learning curve, Avalara can be a good choice for you.
You'll benefit from its numerous integrations, as well as the ability to customize the services you're paying for to meet your company's needs.
Pricing
Avalara is not transparent about pricing online, unlike some competitors like TaxJar. The company also charges $349 per location, which is more than many others charge.
Reviews
Avalara receives mostly positive reviews, earning 4.7 out of a possible five stars on Capterra, a site dedicated to helping companies find the right software solutions.
However, reviews were mixed with regard to the service the company provided, with some customers expressing dissatisfaction with the help they received during the setup process and others praising the support they were offered. On the plus side, customers commented that Avalara was more accurate than many competitors regarding accurate tax calculations.
What is Anrok?
While Avalara offers comprehensive solutions for companies across a wide variety of industries, Anrok is a more niche solution. Specifically, it calls itself the "global sales tax platform for software companies." If your business sells software as a service and you want a solution designed specifically to meet your needs, this tool is one of the best.
Because of its narrower focus and simpler design, Anrok is easier to learn than Avalara. It also offers unique features most competitors don't, including the option to connect with HR information to track how employee locations track your nexus.
Key Features
Here are some of the key features that Anrok offers.
- Sales Tax Compliance: Anrok provides help with sales tax compliance not only in the U.S., but also across the globe. You can track your obligations and fulfill requirements for both sales tax and VAT exposure in any region, country, state, or home-rule city.
- Nexus Tracking: Anrok offers a free nexus study that helps you see your economic and physical nexus after connecting billing and HR tools. You can see your nexus status across jurisdictions at a glance and even connect your HR programs to track whether employee location is impacting your nexus. If you hire a new remote employee that has an impact, you'll be notified of that as well.
- Sales Tax Calculation: Anrok integrates with your current billing and payment tools to accurately calculate sales tax in real-time when invoices are created or when your customers are checking out.
- Filing and Remittance: With pre-built returns and options for automated filing, Anrok makes filing returns easy. Unlike some competitors, Anrok also registers you for free in any jurisdiction in the U.S. including states, cities, and home-rule jurisdictions.
- Exception Certificate Management: Anrok allows you to upload and manage exemption certificates on one convenient, easy-to-use platform.
Available Integrations
Anrok makes integration with your financial stack easy. You can connect both billing and HR systems, while many competitors focus on sales platforms alone when determining your nexus. When you connect to your software, you can import historical data to see existing liability. Here is some of the software you can integrate with:
- Xero
- Intuit Quickbooks
- Bill
- Maxio
- Oracle Netsuite
- Stripe
Customer service with Anrok can also work with you to find a solution if you have multiple systems or need a custom-built integration.
Pricing
Anrok offers three different plans designed to fit your company's size. Pricing isn’t published on their website, but according to Trust Radius, they include:
- Starter: This $499 package comes with global exposure monitoring, sales tax calculation, filing, and remittance; exemption certificates; no-code integrations with popular programs; and physical nexus tracking.
- Core: This $999 option adds a global exposure modeling tool, ongoing tax and compliance support, integration with NetSuite and Salesforce, API technical consultations, and support for multiple entities. You'll also pay 30 bps per taxable transaction
- Growth: In addition to the Starter and Core features, you'll also be able to access historical U.S. tax return filings; get access to advanced exemption certificate management and a reconciliation tool, and be assigned a dedicated onboarding manager. Your tax return review period will also be extended and you'll benefit from MSA and a single sign-on. Pricing for this tier is customized to you.
Who is Anrok best for?
If you're a SaaS business and you want tax software specific to your needs, Anrok is the right choice. You'll benefit from a dedicated program designed for your industry and get affordable assistance with global tax compliance.
Reviews
Anrok received 4.5 out of 5 stars across over 150 customer reviews on G2. Customers describe it as "instrumental" in helping them comply with sales and use tax obligations and report that it "makes life easier." However, some customers did highlight integration issues, while others reported having some technical difficulties getting set up.
Numeral is a third option to consider
If you're considering Avalara and Anrock, Numeral is another option worth looking at.
Numeral is run by CPAs and offers a white-glove solution that aims to make sales tax genuinely simple. There's no steep learning curve to worry about, and once you're up and running, you can spend less than five minutes per month on compliance. If you do have issues, you'll benefit from 24/7 customer support, which most competitors don't offer.
Numeral's price is competitive, with state tax registrations priced at half the amount Avalara charges. There's no monthly subscription, and fees are transparent, so you aren't left guessing.
You'll also benefit from additional features and services with Numeral that not all competitors offer, including a comprehensive report not just on sales taxes you collect but also on the taxes you pay so you can determine at a glance if you're at risk of under collecting.
Getting started with Numeral is as easy as booking a free demonstration, and there's no long-term commitment required, so you have nothing to lose by giving it a try. Contact Numeral today if you want a comprehensive software solution that's actually easy to use.
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Final Thoughts
Finding the right sales tax software is essential for any business operating online -- which is almost every business today.
Avalara, Anrok, and Numeral each come equipped with features that can help simplify the process, but it's up to you to decide which best serves your needs based on price, customer service, and ease of use.
Don't settle for software that doesn't accomplish your goals-- research all of the best sales tax software solutions to find a program you love.
