See the Total Economic Impact of Avalara™
What’s the return on investment for your tax software? Learn the ROI you could see with Avalara by reading the TEI study from Forrester Consulting.
Understand the ROI of your compliance solution
Today’s fast-paced market is driven by technology more than ever. Ecommerce has become the standard, and more businesses are making the switch to digital. Even so, there are still many companies whose growth is hamstrung by outdated systems and manual processes. Not only is manual compliance tedious and time-consuming but it also exposes your business to the risk of incorrect and/or out-of-date data.
As the size and scope of a business grows, so too does the complexity of its tax compliance. This complexity has forward-thinking companies adopting tax compliance software to automate the process for them. However, while tax compliance software can help make the problem easier, is it actually providing a return for your business?
These days, it’s not enough to simply automate your compliance process. It’s imperative that your suite of tax compliance solutions is providing the return on investment necessary to justify the expense.
With that in mind, Avalara commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study that took a closer look at the return on investment (ROI) companies might expect by automating tax compliance with Avalara.
Forrester interviewed six different businesses with experience using a range of tax solutions from Avalara and combined the results to create a single composite organization that uses Avalara AvaTax, Avalara Exemption Certificate Management, Avalara Managed Returns, and Avalara Tax Research. The study determined the ROI experienced by the composite organization based on a three-year, risk-adjusted present value (PV).
Read more about what we learned from the study in this preview of the quantified and unquantified benefits seen by businesses that use Avalara.
Be sure to download the full study to learn more about the ROI your business could see with Avalara.
Net present value (NPV) of $465,000 over three years
The composite organization saw benefits of $770,000 over three years versus costs of $305,000 for a net present value of $465,000.
153% return on investment (ROI) over three years
With an NPV of $465,000 to costs of $305,000 over three years and benefits of $770,000, the ROI was 153%.
Download the full study on the Total Economic Impact of Avalara™
Learn the return you could see using solutions from Avalara, where you could save, and benefits your business could see.
Get the study
Key findings and benefits
In the study, participants disclosed the struggles they were facing with tax compliance before enlisting Avalara as their automated tax compliance solution of choice.
Prior to Avalara, the interviewees said it was a struggle to remain current with tax obligations. Subjects were frustrated because of changing tax laws across every jurisdiction. These changes made it challenging to collect and file the correct amount of taxes.
In addition to the challenges of keeping up with nexus and new tax jurisdictions, managing exempt customers became more difficult as businesses expanded. Storing physical copies of certificates resulted in missing expiration dates or losing certificates entirely. Furthermore, the companies exposed themselves to greater audit risk as a result of this missing information.
Thankfully, the interviewees were able to solve many of these issues by adopting solutions from Avalara. Learn more about the benefits these businesses saw, and what they could mean for you.
Quantified benefits
Among the benefits recorded by the study were several standout areas where Avalara solutions provided meaningful savings. These benefits ranged from less time spent thanks to automation and improved efficiency to cutting down on the need to hire third-party experts.
Risk-adjusted present value (PV) quantifiable benefits from the study included the following:
1.
Streamlining the tax filing and returns process by 85% for a three-year savings of over $83,000.
2.
Cutting 510 hours a year streamlining, managing, and filing tax returns.
3.
Eliminating 416 hours of work per year by making sure exemption certificates are completed properly.
4.
Improving audit preparation efficiency to 85%, reducing time spent per audit by 34 hours.
5.
Saving $150,000 per year by reducing spending on third-party tax experts.
6.
Taking back 384 hours annually by avoiding and recapturing 90% of tax research work.
These are only some of the quantified benefits discovered during the study. Learn more about how these benefits were achieved and read detailed explanations of why and how Avalara provides a return for its users.
Efficiency gained for audit preparation
85%
Unquantified benefits
On top of the many measurable advantages of Avalara were other benefits that were harder to define in numbers, but still valuable to both the interviewees and their clients. These advantages included reputational benefits on top of the simplification and optimization of business operations.
Additional benefits that provided value to the interviewed businesses but could not be quantified for the study included the following:
1.
Reducing sales tax liabilities.
2.
Making expanding into new jurisdictions easier.
3.
Receiving access to reliable expertise.
4.
Streamlining processes for salespeople that need to validate certificates.
5.
Minimizing shipping errors with address confirmation.
6.
Bolstering confidence regarding tax compliance.
7.
Focusing on business tasks instead of tax compliance.
8.
Optimizing voluntary disclosure agreement (VDA) processes.
9.
Building credibility with customers.
See a more detailed analysis of how tax compliance solutions from Avalara could provide these benefits and what it could do for you in the full study.
Senior tax director, manufacturing
“When I’m not on Avalara, we’re — on a good day — only 25% to 30% compliant. And when you get on Avalara, you’re probably 95% to 100% compliant. That’s the big difference to me.”
Costs
To fully appreciate and understand the level of ROI Avalara can provide, it’s important to know the costs against which the interviewed businesses were compared.
The following costs were considered over a three-year period in helping to determine the ROI provided by Avalara:
Avalara licensing fees based on the following parameters:
- 10,000 annual transactions
- 2,000 exemption certificates with an additional 100 net-new certificates each year
- 400 managed returns
One Avalara connector
Implementation costs. The study assumes a team working four months on Avalara implementation and optimization plus 30 days troubleshooting the integration.
Ongoing training and management costs. The study assumes a senior tax manager from the composite organization dedicating two weeks to learning the solution. It also assumes an accounts receivable specialist dedicating a full day to learning Avalara Exemption Certificate Management. In addition, these employees would dedicate one hour per quarter learning updates and 10 hours per year for one employee to fine-tune the system.
The costs over three years totaled $305,000 compared to experienced benefits of $770,000 during the same time frame. This resulted in an NPV of $465,000 and a 153% return on investment.
Learn the ROI your business could see with Avalara
Your tax solution should do more than simplify and improve your compliance process. It’s important that your solution is improving the process while also providing a return for your business. Learn more about the ways Avalara can help your business save, both in quantifiable numbers and intangible benefits.
Get your copy of The Total Economic Impact™ Of Avalara study and see how the right solution can improve both your compliance process and the bottom line.