Sales tax can be one of the most complicated aspects of business for e-commerce and software-as-a-service companies. This is because sales tax regulations for these types of products vary from state to state (and from country to country).
Keeping up with them all can be close to impossible. That’s why a host of sales tax compliance solutions have arisen — software that aims to make your life easier by managing your sales tax obligations for you. Typically, they register your business where necessary, calculate your sales tax obligations, file your returns, and pay each tax-collecting entity, without you having to lift a finger. There are a lot of options, including purpose-built solutions for ecommerce, accountants, and enterprises.
In the world of enterprise-grade sales tax solutions, Avalara and Vertex stand above all others. These well-established products were designed with large enterprise clients in mind. Both can handle massive, international workflows.
However, each platform does have its strengths and weaknesses. It’s important to understand them before making a decision on something as important as sales tax compliance software. In this article, we’ll delve into everything you need to know about these two sales tax solution giants.
What is Avalara?
Avalara is one of the most widely used sales tax compliance platforms for large enterprises. It’s known for its incredibly comprehensive suite of tools and its global reach. Avalara was designed to simplify the complex process of tax management, and it has become popular amongst large e-commerce companies with global operations. It offers customers an end-to-end sales tax solution — from calculating taxes to filing and remitting payments — making the lives of clients easier around the world.
Core features of Avalara
Avalara was designed with large enterprises and complex sales tax situations in mind. In order to accommodate these companies, Avalara has a wide range of features, including:
- Sales tax compliance: Automates compliance by ensuring accurate tax calculation and reporting across jurisdictions.
- Sales tax calculation: Uses a powerful tax engine to calculate rates in real time, based on customer location and product taxability.
- Nexus tracking: Helps businesses identify where they have established nexus, ensuring that they register and collect taxes in all applicable regions.
- Filing and remittance: Automatically prepares and files returns and remits payments to tax authorities, saving time and reducing errors.
- Exemption certificate management: Tracks and stores exemption certificates, making it easier to comply with audits and customer-specific exemptions.
Additionally, Avalara has one of the most comprehensive lists of no-code integrations out there. It can easily integrate with a wide range of ERP systems, such as NetSuite and SAP; e-commerce platforms such as Shopify, Amazon, BigCommerce, Salesforce, eBay, and Etsy; and billing software such as Stripe and Recurly.
As you might expect, if they don’t have an out-of-the-box integration for an app that your company relies on on a day-to-day basis, they offer API access and support. This allows you to tailor integrations that work for your company, no matter what software you’re using.
Pricing and getting started
Unfortunately, given Avalara’s complexity, pricing is not disclosed online. Instead, you need to book a demo with the sales team, so they can evaluate your needs and create a custom plan that works for you. Avalara’s pricing is based on a wide variety of things, including the number of transactions your business does, the jurisdictions it sells in, and the features it requires.
Who is Avalara best for?
Avalara can handle multi-jurisdictional compliance, automate filings, and manage exemptions, which makes it an ideal choice for enterprises with complex tax obligations. In addition, if your company is expanding internationally, Avalara can help navigate the complex tax obligations created by international commerce.
Reviews and insights
Avalara is widely used software, so there are plenty of reviews on its Capterra page. Although they have 4.1 stars (out of five) and more than 300 reviews, there are some concerning things that can be gleaned from reading through comments. Many people mention that although the product is great, the customer service leaves much to be desired. Avalara is often compared to TaxJar and Anrok, too.
What is Vertex?
Vertex is another popular sales tax solution that’s known for catering to the needs of enterprise-grade clients and businesses with complex tax needs. The company relies on decades of experience in the industry, and its sales tax compliance solutions have a stellar reputation.
Core features of Vertex
Vertex offers a wide range of tools designed to handle the sales tax intricacies associated with running a large-scale enterprise, such as:
- Sales tax compliance: Ensures that businesses remain compliant with tax regulations across multiple jurisdictions.
- Sales tax calculation/engine: Provides accurate tax calculations in real-time, incorporating product taxability rules and location-based rates.
- Nexus tracking: Monitors nexus obligations to ensure that businesses register and collect taxes wherever required.
- Filing and remittance: Streamlines the preparation and filing of tax returns, while automating payments to tax authorities.
- Exemption certificate management: Simplifies exemption certificate tracking, helping businesses stay audit-ready.
In addition to these helpful features, Vertex also has the ability to integrate with your existing software stack, with countless no-code integrations available. Vertex can integrate with ERP platforms like SAP and Oracle, customer relationship management tools like Salesforce, e-commerce platforms like Shopify and Magento, and many other applications.
If they don’t have a pre-built, no-code integration for software that your business uses, then you can always use their API access to design a custom integration. This ensures that Vertex can be integrated into practically every single software stack out there!
Pricing and getting started
As with Avalara, Vertex’s prices are not published online. You need to book a demo with them so a sales team can go through your specific needs. Similar to Avalara, Vertex’s pricing is based on transaction volumes, the specific needs of your business, and the jurisdictions it sells in. However, it’s important to mention that using Vertex is relatively expensive.
Who is Vertex best for?
Since Vertex is focused on large enterprise clients with complex tax requirements, that’s who the product is best for. Vertex customers are typically large retailers and manufacturers, SaaS companies, and other companies that require its robust calculation engine and customizable features.
Reviews and insights
Vertex is beloved by its customers, with a rating of 4.3 stars (out of five) on its Capterra page, based on more than 75 reviews. Several customers tout the ease of use and the exceptional customer service that Vertex provides. However, others say that Vertex is a single point of failure that can cause big problems when it occasionally has an outage.
A third alternative worth considering
Although Avalara and Vertex are giants in the enterprise-grade sales tax compliance space, few businesses actually need all the services that they offer. Numeral is a versatile alternative designed with small and midsize businesses in mind. Numeral works across a variety of industries, has an easy-to-use interface, and can automate almost everything related to sales tax in your business!
How does Numeral compare with Avalara and Vertex?
Numeral provides many of the features and services that Avalara and Vertex offer, including:
- Comprehensive tax engine: Like Avalara and Vertex, Numeral offers a tax engine capable of handling real-time calculations, nexus tracking, filing, and remittance. It’s built to manage the complexities of multi-jurisdiction compliance.
- Cross-industry versatility: Unlike Vertex, which focuses on enterprises, or Avalara, which leans heavily into SaaS and e-commerce, Numeral serves businesses of all sizes and in all industries. This adaptability makes it a strong choice for midsize companies growing into enterprise territory.
- Streamlined setup: Numeral stands out for its intuitive user interface and relatively simple setup process, making it an attractive option for businesses seeking powerful tools without the steep learning curve.
Numeral also offers a user-friendly interface, adaptable features, and some of the best customer service in the industry. This makes integrating Numeral into your existing stack a breeze. Additionally, Numeral is considerably more affordable than Avalara and Vertex, making it an excellent choice for small and midsize businesses that can’t afford and don’t need enterprise grade software.
Pricing and getting started
Unlike Avalara and Vertex, Numeral has straightforward pricing without any hidden fees. When using Numeral, you don’t have to worry about calculating your monthly costs based on the number of orders you received or the revenue your business generated.
Instead, Numeral charges a flat fee for everything they do. To register your business in a new state, Numeral charges a flat fee of $150. Once your business is registered, Numeral charges a flat $75 filing fee per filing!
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Which sales tax compliance tool is right for me?
Ultimately, the perfect sales tax compliance tool for you and your business will be the one that fits your needs the best. Avalara is designed to provide top-notch service to large e-commerce businesses and software companies, while Vertex is great for enterprise-level businesses that are operating in e-commerce, traditional retail, and manufacturing.
Unfortunately, few businesses fit these molds, as few companies can afford to pay thousands or tens of thousands of dollars per year for sales tax compliance. This is where Numeral comes in. Numeral offers many of the same features that Vertex and Avalara do, with an easy-to-use interface at a fraction of the cost. This makes Numeral a great choice for practically any small or midsize business!
