Modernizing Tax For The Enterprise: Supporting ERP Modernization, Global Compliance, And Growth At Scale

Avalara commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Avalara.¹ This spotlight focuses on large enterprises that use Avalara to support tax modernization initiatives during enterprise resource planning (ERP) transformations, global growth initiatives, mergers and acquisitions, and broader digital transformation strategies. It builds upon Forrester’s previously published TEI study and highlights themes that were particularly relevant to enterprise organizations.

New interviewees for this spotlight included:

• A chief technology officer for a financial services organization in the US with 1,200 employees.

• A senior tax and legal specialist at a global manufacturer with $3.9 billion in annual revenue.

• A business systems analyst from a fitness franchising firm with $3.5 billion in annual revenue.

• A finance solution architect from a global manufacturer with $1.4 billion in annual revenue.

Interviewees from enterprise-sized firms from the original case study included:

• A finance and operations decision-maker from an industrial automation firm with around $2.2 billion in annual revenue.

• A tax manager from a global manufacturer with around $500 million in annual revenue.

• A tax compliance leader for a global professional services firm with around $2.7 billion in annual revenue.

Large enterprises face increasing tax complexity as they expand into new jurisdictions, execute acquisitions, modernize ERP platforms, and respond to evolving compliance obligations. Unlike smaller organizations, enterprises often manage hundreds of legal entities, thousands of exemption certificates, multiple tax jurisdictions, and complex ERP landscapes. At the same time, tax departments remain under pressure to control costs and scale without adding proportional headcount.

Interviewees said ERP modernization projects frequently acted as the catalyst for tax transformation. As their organizations migrated from legacy ERP systems to modern cloud-based platforms, they often reevaluated existing tax processes and sought opportunities to automate compliance, improve audit readiness, and establish a scalable foundation for future growth.

Interviewees noted that Avalara provides a cloud-based platform that automates tax calculation, exemption certificate management, returns preparation and filing, tax research, VAT reporting, and related compliance activities. Interviewees described using Avalara to reduce manual work, centralize tax processes, support acquisition activity, and improve scalability while maintaining confidence in compliance outcomes.

Investment Drivers Enterprise Buyers Of Avalara

The interviewees’ organizations adopted Avalara to modernize tax operations and support growth initiatives. Prior to implementation, these organizations struggled with several challenges in their legacy environments, including:

• ERP transformation that required modernization of tax processes. Interviewees said tax modernization initiatives often coincided with broader technology transformation efforts. As their organizations outgrew legacy tax processes, expanded through acquisitions, implemented enterprise ERP platforms, or entered new markets, they frequently reevaluated tax operations and sought opportunities to automate compliance activities, improve audit readiness, and establish a scalable foundation for future growth.

• Manual tax management that did not scale with enterprise growth. Interviewees reported significant increases in tax complexity due to acquisitions, expansion into new jurisdictions, and broader product portfolios. Their tax teams often remained relatively small despite rapid business growth, creating pressure to automate compliance activities and reduce dependence on manual processes. The finance and tax operations decision-maker from an industrial automation firm said: “The biggest benefits we get from Avalara are efficiency, scalability and accuracy. Now we can scale. Earlier we used to only have the US as an entity — we started with US [and] Canada — [and] now, we are scaling to Mexico and then to Vietnam and so many other countries, and AvaTax supports that.”

• The need for stronger governance around exemption certificates and audits. The interviewees’ enterprises managed tens of thousands of exemption certificates and often lacked consistent processes for collecting, validating, storing, and retrieving documentation. Interviewees said this created audit risk and consumed significant administrative resources. One tax professional responsible for nearly 45,000 exemption certificates described exemption certificate management as “a whole other job,” noting that certificate administration remained a primary responsibility for a dedicated team member.

Avalara Features

The interviewees’ organizations chose to invest in Avalara for the following reasons:

• Integration with major ERP ecosystems. Interviewees highlighted Avalara’s ability to integrate with ERP and e-commerce platforms. Several interviewees cited ERP compatibility as a key factor in selection decisions and described the integrations as helping automate tax determination directly within operational workflows.
  The finance and tax operations decision-maker from an industrial automation firm said: “[Our legacy ERP] used to have their own engine to bring the tax rates. When we went into SAP, we initially went live without any tax engine, and it was a lot of manual calculation and [we had to] manually configure jurisdiction codes and add tax rates every month. It was painful. Then, we implemented our Avalara tax engine, so many of the things we used to do manually are far better now. We now have state-level property tax determined and we can validate and confirm many things with the Avalara tax engine. Before Avalara, we were spending more than 80 hours a month calculating those taxes manually — more than 1 FTE.”

• Centralized exemption certificate management. Interviewees whose organizations managed thousands of exemption certificates said they used Avalara to centralize storage, automate renewal campaigns, and simplify certificate retrieval. Interviewees said automation reduced administrative effort while improving compliance readiness.
  The tax manager for a manufacturer said: “Avalara had delivered a big-time savings for our accounts receivable department when they no longer had to manually manage exemption certificates. We were adding several new customers a day, and it’s saved an hour to 2 hours a day.”
  The business systems analyst from a fitness franchising firm said: “From a technical perspective, the wide range of plug-in tools Avalara has is amazing. The fact that they’re able to manage the volume of exemption certs and plug into the system so once it’s probably configured, stops us from [spending time] second-guessing if a certificate is valid.”

• Managed returns and automated compliance. Enterprises used Avalara Managed Returns to automate the preparation, filing, and remittance of sales tax returns. Interviewees described this capability as a major source of efficiency and consistency, particularly as filing obligations expanded across jurisdictions.
  The tax compliance leader said that their professional services firm said that their organization hadn’t planned on buying Avalara’s managed services but, after deploying Avatax, this interviewee said: “Avatax is a phenomenal product, but I think that Managed Returns has ended up being an even better purchase for our business. It’s a very reasonable price and it’s outsourcing very simple mundane work that Avalara does a fantastic job of.”

• Scalability for acquisitions and expansion. Interviewees emphasized the ability to onboard acquired entities, add jurisdictions, and support business growth without major rearchitecting of tax processes. Several interviewees described Avalara as providing a scalable foundation for growth.

Key Results For Enterprises

The results of the investment for the interviewees’ organizations include:

Improved scalability and support for business growth. Interviewees described Avalara as providing a scalable foundation that enabled their organizations to support acquisitions, geographic expansion, and growing compliance requirements without proportional increases in staffing or administrative complexity.

• Organizations absorbed acquisitions and expansion without proportional headcount growth. Interviewees said Avalara helped support acquisition activity and entry into new jurisdictions while maintaining lean tax teams. Several interviewees stated they would otherwise need to add personnel to keep pace with compliance requirements. The tax compliance leader at a global professional services firm noted that following Avalara’s deployment, their organization continued its acquisition strategy, completing roughly 15 additional acquisitions while maintaining largely automated tax operations. Rather than increasing tax headcount to manage added complexity, this interviewee’s organization leveraged Avalara’s scalable architecture to onboard new business units with minimal incremental effort, helping tax and finance teams keep pace with growth without adding additional headcount.

• Enterprise organizations established a scalable compliance foundation. Interviewees described Avalara as supporting ongoing ERP transformation initiatives and enabling future growth without requiring major redesigns of tax processes. Following deployment of Avalara, tax determination and tax rate management became automated, reducing administrative effort while improving tax accuracy, consistency, and scalability as the company expanded operations across the US, Canada, and Mexico.

Greater efficiency and automation across tax operations. By automating core tax and compliance processes, interviewees’ organizations reduced manual effort and enabled tax professionals to spend more time on strategic activities rather than administrative tasks.

• Managed returns eliminated substantial manual effort. One interviewee estimated that managing sales tax filings internally at their organization would require approximately one full-time employee. By automating returns preparation and filing, internal resources could focus on more strategic activities.

• Tax professionals shifted their focus to higher-value work. Interviewees reported that instead of spending time preparing returns, maintaining tax rates, or managing filing schedules, their organizations increased capacity for tax planning, acquisitions support, tax research, and business partnership activities.
  The tax compliance leader at a professional services firm explained how Avalara has allowed their employees to do more strategic work: “Our team can focus on being involved in acquisitions and dealing with the tax implications of those acquisitions. We don’t need to outsource those decisions or use consultants for strategic projects. Since we deployed Avalara, we’ve been able to dive into a lot of how we’ve previously done things and applied tax law to make decisions on how we charge taxes. We’ve been able to change processes we’ve done for over 10 years because we’ve had the capacity to do it now.”

Improved audit readiness and compliance confidence. Interviewees emphasized reduced audit exposure and downstream financial risk from incorrect tax calculations, particularly given the complexity of tax rate management across jurisdictions.

• Centralized tax data reduced audit preparation effort. Interviewees noted that auditors were familiar with Avalara outputs and were often able to move more efficiently through audits because tax calculations and documentation were centrally maintained and easier to retrieve.
  The tax manager from the manufacturer said: “Auditors ask you to provide your documentation electronically. We say, ‘Yes, we’re on Avalara.’ The first thing they say is, ‘Oh, well, that just made the audit easier because I don’t have to audit the software. I know the software is premium, and it’s giving the right conclusion based on the input. What I have to audit is your company’s input into the system because garbage in is going to be garbage out.’ Using Avalara makes the auditors more comfortable. Auditors are familiar with Avalara’s reputation and the output from the platform.”

• Organizations reduced exposure to penalties, notices, and compliance errors. Automated rate maintenance, consistent tax calculations, and centralized exemption management improved confidence in compliance outcomes and reduced operational risk.