Making it easier for companies to pay their tax bills
When Avalara wanted to make it easier for clients to buy its products, we helped create an ecommerce platform.
Avalara has made a name for itself by pioneering an automated solution to an arduous problem: Calculating the correct sales tax rates for everything from shoes in New York City to soft drinks in Kissimmee, Florida.
Now, it’s building a technology solution to address another ubiquitous challenge: The ability to get more of its products to more customers.
The tax technology company recently worked with Slalom to launch a new ecommerce platform. That’s a major change after years of finalizing sales the old fashioned way—by picking up the phone.
The move comes as the company continues to grow. To date, Avalara has received more than $200 million in capital and has made a number of acquisitions designed to help companies—and their customers—avoid errors and pay the right tax rates without leafing through dusty manuals.
“It’s really (about) our ability to scale,” Tom Parker, Avalara’s chief information officer, said of the ecommerce platform.
Increasing efficiency and making customers happier
Given that it is 2015, it may not seem that revolutionary to build an ecommerce platform. But for a company like Avalara, which uses a personal touch on every sale, it made sense to look at alternatives for increasing efficiency and making customers happier.
In the company’s early stages, sales tax calculation products usually had to meet a highly individualized need. A shoe company in Colorado would calculate very different taxes using an entirely different invoicing system than a specialty chemical sales operation in Washington state, and Avalara wanted each of those customers to have the exact right tools for their needs.
The cult of the customer
“We believe in the cult of the customer,” Parker said.
As the company grew to the point of adding thousands of new customers per year, Parker said it was becoming impractical, and often unnecessary, to continue to make every sale manually. That’s especially true for some of its more basic offerings, and also for additional products it sells to existing customers.
Mike Geyer, a client service partner with Slalom who worked on the ecommerce project, said they also realized that not everyone who buys Avalara products—primarily IT experts and accountants—wants to have a social interaction with a salesperson each time they are making a purchase.
The company didn’t want to miss out on a sale because a client preferred to be able to buy the product directly online.
That’s a familiar refrain in an era when people have grown more accustomed to buying things over the Internet. Parker noted that he himself will avoid buying things at stores if he can make the purchase online instead, just so he doesn’t have to deal with the salesperson.
Nevertheless, Avalara knew it needed to tread carefully. After all, this is a company so concerned with customer satisfaction that it has life-sized cutouts of customers in most of its conference rooms, as a reminder of who should come first.
Just the beginning
The company worked with Slalom to create an automated system that offers the customer plenty of information about how its tax products do everything from using geocoding to determine precise tax rates to constantly updating with the latest tax rates and rules. It also made sure that customers always had the option to talk to a sales person at any time.
Avalara is making the transition slowly to ensure they do not alienate prospects and customers.
“We’re just in the infancy of this,” Parker said. “We’re still learning.”
Avalara was co-founded in 2004 by Scott McFarlane, Rory Rawlings, and Jared Vogt.
The company makes a number of products that allow businesses to automatically figure out how much sales tax they owe for a particular sale—something that had previously mostly been done by looking at charts or buying very expensive software and hardware.
The company’s products automatically update with the latest tax rates, and work directly within bookkeeping tools such as Intuit’s QuickBooks and most major ecommerce shopping carts. That allows companies to run the sales tax technology inside their existing financial systems.
Avalara is headquartered in Bainbridge Island, Washington, a ferry ride away from Seattle. It also has offices in Seattle and elsewhere around the country. The company has received more than $200 million in capital funding and employs around 800 people, according to GeekWire.