How to Calculate Sales Tax in Microsoft Dynamics AX

Avalara AvaTax connects easily with Microsoft Dynamics AX to deliver a robust sales tax automation tool.

If you are a business running Microsoft Dynamics AX, it's easy to automate your sales tax compliance process using AvaTax. This demo give you a preview of the process.

Transcript

Hi, I'm Mark Wilhelm, Director of Product Integration here at Avalara. I'm a recovering accountant, also one of the very early employees, starting back in 2005. I'm here today to talk about AvaTax for Microsoft Dynamics AX, but first, let me share some of the facts about the power of AvaTax. Every day, our tax decision engine processes literally millions of sales tax calculations and when it comes to returns and filing, our customers rely on Avalara technology and services to file hundreds of thousands of sales tax returns every year. What's more, AvaTax integrates with virtually all the well-known ERP and financial applications, as well as POS, e-commerce and mobile systems, so if you acquire a company that's running a different financial application, no problem. You want your sales force to begin collecting sales tax in the field on a mobile device, no problem. Want to begin selling online, no problem. Your admin console is the place you can monitor all of your disparate systems and manage your sales tax compliance in one place.

Let me explain how fast and easy it is to get started in AvaTax. First, you're going to get a call from our GoLive team. They're going to help you set up your admin console, and work with your partner to connect into Dynamics AX. Next, you're going to map your products to AvaTax tax codes. For most of our customers, it's a fast and simple process using the tools we've built into Dynamics AX. You're either going to map groups of SKUs or individual SKUs to your tax codes. Let me show you the remaining steps in Dynamics AX.

Within the AvaTax admin console, we start at the Home tab. The Home tab is your resource center for everything AvaTax. Next, I'll move over to the Organization tab. This is where it is defined my company or set of companies that will run AvaTax. I'll next drill into the Nexus section. Here in Nexus, I'll go in and define the state or set of states where I wish to collect sales tax. Next, I'll go into Dynamics AX. I'll open up a customer record, select my customer, go over to the Set Up tab and probably here's one of the important elements. You're going to go into Sales Tax Group. I no longer have to define the city, county or state where I wish to collect sales tax directly within AX. I select AvaTax as my sales tax group and AvaTax will calculate sales tax everywhere that I have defined Nexus.

In addition to tax calculation, AvaTax provides address validation service. Going into my address record, any time that I edit an existing address or add a new address, you'll see the address validation button. Selecting that will validate the address and return the U.S Postal Service normalized address format. Clicking Functions and Accept, I will now save that address, and then clicking Save will update AX with that information. Address validation is not only important for normalizing the address within the AX but AvaTax, as demonstrated here on GeoSalesTax.com, powered by AvaTax technology, if I were just to generate a sales tax calculation using a five character zip for, let's say Commerce City, Colorado, you'll see that I would mostly return an 8.35% sales tax rate. However, if I go directly across the street from that point, you'll see that the sales tax rate is now changed to 4.85%. Only AvaTax, using their geo-spatial technology, will assign the jurisdictions based upon the specific address associated with the calculation. We will return the correct sales tax calculation each and every time.

Going back into Dynamics AX, I'll close my customer record, after having saved that, and now I'm going to generate a sales order. Click the New button to generate a sales order, select my customer, and Okay. I'll identify that product that my customer wishes to purchase. Once I have done that, I can get a tax calculation by hitting the Set Up button and clicking Sales Tax will calculate sales tax and apply it to the sales order. And then, when I'm ready to invoice, I come to Posting, Invoice, select Okay and, moving forward, will post this transaction and generate the invoice identifying sales taxes that has been calculated for state, county and any special tax jurisdictions.

And then finally, probably the most powerful element about AvaTax is going back into the Admin console and generating a report at the end of the month. The report will identify sales tax that has been calculated everywhere and, from this report, I can then generate my own sales tax return, though I must say, it's even easier if you just turn on AvaTax returns and leave the filing and remitting to us.

I hope you found this video helpful. There's never been a more complicated time in the world of sales tax compliance. That complication means there has never been a better time for sales tax automation. With AvaTax, you'll never have to worry about sales tax again.