Providers of sales and use tax software are making their solutions increasingly simple and user-friendly to counter the complexities in this area of taxation. Automation and integration are the two biggest capabilities these vendors are deploying in marketing their products.

But accounting firms are still necessary consultants in guiding clients through the tricky terrain of sales and use tax. Many accountants are just beginning to service their clients with these solutions, having waited for vendors to offer more robust tax content or better integration capabilities. We spoke to two CPA practitioners that recommend two different sales and use tax solutions (out of a range they recommend) to their clients to gain insight into their experience.



Company: BDO

Users: 12 clients, with 6 in the pipeline

Product: Vertex SMB

Commencement date: About six months ago

On record: Steve Oldroyd, director at BDO USA

Process: Oldroyd recently began referring his clients to Vertex SMB based on the sales and use tax solution’s price point and ease of use. “It’s adequately and fairly priced,” he said. “I’m not technical, but it’s easy. It’s almost point-and-click; very intuitive. It makes me happy because I don’t have the patience for complexity. It’s a really nice package.”

Oldroyd also reports that the installation process is “fairly easy,” though the real work comes in mapping clients’ products. The time spent on that pre-implementation process varies based on the number of revenue streams per client, though typically his clients, many of which are software companies, have between five and six.

The implementation itself does not take more than a day, according to Oldroyd, especially with the upfront work of identifying mapping configurations.

During implementation, Vertex and Oldroyd help the client set up their current ERP system (often Dynamics GP or NetSuite) to interface with Vertex SMB. With this integration, Vertex recognizes the type of product reported and how to map it, processes the transaction, and, if it’s taxable, applies the tax rate based on the zip code. It also identifies exempt clients.

Results: Complications that do arise are from products and services that are not easily categorized, Oldroyd explained.

“There’s a fine line, between product as a service or service as a service … When a client doesn’t exactly fit the category, like cloud SaaS or electronic delivery, you can set up your own.”

Oldroyd also touts the company’s customer service: “They’re always on the spot. We set up calls to go through the implementation, and they were there for us when a client’s connector didn’t work — it’s usually a client issue. They’re very responsive and that sets itself apart.”

Next steps: Based on the early but positive response, BDO and Oldroyd plan on putting more clients on Vertex SMB. “We want to be hopefully one of the bigger outsourcing groups [for Vertex SMB]. We view it as a nice product we would never compete with at the end of the day. We provide the higher-level consulting services they don’t provide. It’s a pretty good relationship, and we’re just starting it. We’re getting a whole team in place, five to six people nationally to try to have two points of contact per time zone.”



Company: Eide Bailly

Users: 19 clients

Product: Avalara AvaTax

Commencement date: A few months ago

On record: Judy Vorndran, state and local tax partner at Eide Bailly

Process: Eide Bailly recently signed license agreements with 16 clients, with three more in process, so they are “just getting traction,” said Vorndran. Where AvaTax was once lacking the subject matter she requires, Vorndran said Avalara has “come a long way in getting content.”

She also reports impressive integration capabilities, though, as with any system, due diligence is required before setting that up. The setup itself takes a “ridiculously short” hour or hour and a half, with some integrations, like its ability to “talk with QuickBooks,” going especially quickly. “What took more time was what clients are selling and how to map it … to make sure you know what you’re selling, the product, to meet the mapping standards of AvaTax. The more you do upfront, the better on the back end.”

While Avalara itself guides clients through the implementation remotely, Vorndran is also on the phone “holding clients’ hands. They know how the system works, I know the client.”

Results: With AvaTax, “the path to compliance is huge,” Vorndran said. “You can set the things up quickly with administrative ease. If you don’t have an automated system, it’s so manual with a lot of paperwork. You eliminate that kind of paperwork when it reports through a system.”

AvaTax “also has fantastic back reporting” for clients that must report on prior taxes.

“Especially in my sphere, my work, with small, privately held companies with no sales tax department, this is scary stuff. [This reporting makes it] easier to work with them,” she explained.

Creating that bridge requires clear communication, which can be an early challenge. “The biggest issue is communication and everyone talking the same language, when someone from an advisory role is different from an IT licensing role — the different business relationships and keeping those together,” Vorndran said.

Next steps: Eide Bailly plans on expanding that Avalara relationship to implement AvaTax internally for the firm in taxing clients. Vorndran estimates around 20 to 30 tax professionals will soon be using the solution.

And while continuing to recommend a range of solutions, the firm will also move toward getting “more and more clients integrated and more clients using it. Some type of automation — this world is ripe for it.”

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