About
Avalara (AvaTax) is a third party cloud-based solution that integrates with ERP Go, in so ensuring Sales Tax calculation for Invoices (generated from Sales Orders) are correct in accordance with US Federal/ State/ County tax jurisdictions by calculating in real-time the correct Tax (and associated fees) whilst taking into account a) ERP Go Company/ Depot location and b) Customer location (for whom Invoice is raised).
Before you start
There are a few things that need to be in place before you can use the AvaTax integration:
Your subscription must include the Avalara and Tax features.
You'll need your Avalara Account ID and License Key.
You'll need the Avalara Tax Integration permission, alongside the Integration permission, to connect, disconnect and sync the integration.
Note: Tax integrations cannot be connected while using a trial subscription.
Step 1 - Setup -> Roles
Navigate to Roles.
Select a Role (End User, Administrator etc.).
Click on System Setup
Enable Read & Write for Avalara Tax Integration.
Step 2 - Setup -> Integrations
To enable Avalara, navigate to System Setup -> Integrations.
Click on Manage.
Step 3 - Setup -> Integrations -> Avalara -> System Setup
Enter AVALARA AVATAX ID and select company linked to ID. Once connected, the Select Company dropdown displays the companies available on your Avalara account. Select the Avalara company you want to use and click Update to save the integration. The connection status will change as you progress through the setup, showing whether you're disconnected, connected but still need to select a company, or fully connected to your chosen Avalara company.
Note: AvaTax is configured per company. Each ERP Go company connects to one Avalara company.
Once you've connected to Avalara and selected a company, the Active option becomes available. Switch Active on to start using AvaTax for that ERP Go company. When AvaTax is active, tax calculations are passed to Avalara instead of using ERP Go's internal tax calculation.
Note: Switching Active to No disables AvaTax tax calculations and reverts tax processing to the configured ERP Go tax behaviour.
Click on Sync Tax Codes (relates to step 5). Click Sync Tax Codes to bring Avalara's reference data into ERP Go. This includes the Product Tax Codes and Tax Exemption Codes you'll use when configuring your tax classes. The synchronisation runs in the background and you'll be notified by email when it has completed.
Click on Update Integration
Step 4 - Setup -> Integrations -> Accounting (Mapping Tax Rates)
Note, integrating to an accounting solution such as QuickBooks or Xero is NOT a requirement to use Avalara, but should users already have an active integration then the following applies. Note, steps assume an accounting integration is already active and would be referring to Xero as an example. To configure from scratch, refer to help article Integrating with Xero & Setup the Xero Accounting integration.
The next step would be to map Avalara Tax rates to the integrated accounting solution's tax rates where users will navigate to Integrations and select (in this example) Xero.
Scroll down to Tax Rate Mappings and ensure each Xero Tax Rate (on the right) is linked to its corresponding rate in Avalara (on the left). Once done, click on Update Integration.
Step 5 - Setup -> Accounting and Charging -> Tax Classes
In step 4, Avalara Tax Codes were synced to ERP Go. In this step we will confirm the necessary Tax Classes were populated for Avalara during said sync as they (in turn) are linked to Tax Rates & Tax Rules which Avalara uses to calculate tax.
Navigate to Accounting And Charges and select Tax Classes.
Ensure the below Avalara Tax Classes are present.
Navigate to Accounting And Charges and select Tax Rates.
Ensure the below Avalara Tax Rates are present.
Step 6 - Setup -> Product -> Pricing -> Tax Class
In step 5, we confirmed the necessary Avalara Tax Rates & Classes were populated during step 4 sync. In this step, we will ensure the correct Tax class is linked to a product under the Tax Class drop down selection by editing a product and clicking on the Tax Class dropdown under the Pricing tab.
On a product tax class, you'll see a Product Tax Code field. This tells Avalara what type of product, equipment or service is being supplied so it can apply the appropriate tax treatment. Products inherit their tax class from your product configuration, and the corresponding Avalara Product Tax Code is sent when tax is calculated. If a tax class doesn't have a Product Tax Code mapped, the transaction line is still sent to Avalara. Avalara will then apply its own default tax treatment.
For more predictable tax calculations, it's recommended that you map your product tax classes to the appropriate Avalara codes.
Step 7 - Setup -> Customers -> Details -> Tax Class
On an account tax class, you'll see a Tax Exemption Code field. This corresponds to Avalara's entity use code and allows you to identify customers that qualify for a particular tax exemption. When ERP Go sends a transaction for that customer to Avalara, the exemption code is included in the calculation.
In step 5, we confirmed the necessary Avalara Tax Rates & Classes were populated during step 4 sync. In this step, we will ensure the correct Tax class is linked to a customer which will ensure the correct tax is calculated in accordance with county/ state regulations by editing a customer and clicking on the Tax Class dropdown under the Details tab.
Avalara uses the origin and destination of the transaction when calculating tax.
ERP Go sends:
Ship-from: the address of your company.
Ship-to: the order's delivery address, where one has been entered. If there isn't a delivery address, the customer's account address is used instead.
Information about the customer, depot and currency is also included to help Avalara determine the appropriate tax treatment.
Note: The AvaTax integration doesn't perform address validation. Addresses are passed to Avalara using the information recorded in ERP Go.
Note: ERP Go doesn't store exemption certificates or certificate numbers as part of this integration. Exemptions are handled through the Tax Exemption Code. Nexus is also configured within Avalara rather than ERP Go.
Step 8 - Processing: Orders vs Invoices
AvaTax behaves slightly differently depending on whether you're working with an order or an invoice. The important distinction is that tax calculated on an order is an estimate, while the tax calculated when an invoice is confirmed is the authoritative figure.
Orders: In the below scenario, a user logged into their Avalara account (using the same Avalara account details specified in Step 3) to view a Sales Order they confirmed in ERP Go which is yet to be posted. Because Invoices has not been posted yet, status reads Unconfirmed.
Invoices: Avalara calculates the authoritative tax figure when you Confirm an invoice.
It doesn't calculate tax while you're editing the invoice in draft, which means a draft invoice will show zero tax while AvaTax is active. When you confirm the invoice, ERP Go sends the transaction to Avalara, receives the calculated tax and applies it to the invoice. The invoice then follows a simple lifecycle with Avalara:
Confirm: ERP Go asks Avalara to calculate the tax and records the result against the invoice.
Post: the transaction is committed to Avalara and becomes part of Avalara's records.
Void: if you void the invoice, ERP Go also voids the corresponding transaction in Avalara.
It's only when Invoice is posted in ERP Go, that it will a) appear in Xero and b) see document status in Avalara changed from Unconfirmed to Confirmed.
Users can drill down to line item details in Avalara to see a breakdown of Invoice in ERP Go and(or) Xero (if applicable).
Credit notes follow the same process and are sent to Avalara as returns. Where a credit is linked to an original invoice, ERP Go also links the return to the original Avalara transaction so Avalara can associate the credit with the original sale.
Taking payments with AvaTax
Because the final tax amount isn't known until an invoice has been confirmed, some payment shortcuts aren't available while AvaTax is active. You won't be able to use:
Take payment and create invoice.
Take payment and confirm from an invoice.
Instead, create the invoice and Confirm it first. This allows Avalara to calculate the authoritative tax amount. Once the invoice has been confirmed and the tax has been applied, you can take the payment as normal.
Logging
Avalara "traffic" (like all other activities in ERP Go) is automatically logged and stored in ERP Go System Setup -> Action log. In the below example, record of Avalara Tax Codes Sync and Update was logged at 11:58 & 12:00 and, at 12:03, a submission of a Tax Invoice.
FAQ's
Why is the tax zero on my draft invoice?
AvaTax calculates the authoritative tax when you Confirm the invoice, not while it's still in draft. Because ERP Go's internal tax calculation is switched off while AvaTax is active, the draft invoice shows zero tax until confirmation.
Why are the tax totals hidden on my orders?
Tax calculated by Avalara at order level is treated as an estimate. The definitive tax amount is calculated when the resulting invoice is confirmed, so tax totals are hidden on the order screens.
Why can't I take a payment yet?
Some combined payment and invoicing options are disabled while AvaTax is active because the final tax isn't known until the invoice is confirmed. Create and confirm the invoice first, then take the payment.
What happens if I don't map a Product Tax Code?
The transaction line is still sent to Avalara, but without a Product Tax Code. Avalara then applies its own default tax treatment. Mapping your product tax classes is recommended for more predictable results.
How do I make a customer tax-exempt?
Set a Tax Exemption Code against an account tax class and assign that tax class to the customer. ERP Go will send the corresponding exemption code to Avalara when calculating tax.
What happens if Avalara is unavailable?
There is no fallback to ERP Go's internal tax calculation while AvaTax is active. If Avalara cannot be reached while confirming or posting an invoice, the action is blocked and the error is recorded against the invoice. For order-level estimates, tax isn't applied if the calculation cannot be completed. If this happens repeatedly, check the Avalara integration and connection.
Is it a pre requisite to integrate to an accounting solution to use Avalara?
No.
Do I choose between Avalara sandbox and production?
No. The Avalara environment is controlled by system configuration rather than a setting on the integration screen.
Can I test my Avalara connection?
Yes. Clicking Connect to Avalara validates your Account ID and License Key with Avalara as part of the connection process.