How to enable AvaTax Integration?

For clients operating in the United States, calculating the tax due on orders can be difficult. The amount due can depend on not just the type of product, but where it's being shipped from and to. Claritum's integration with AvaTax by Avalara makes calculating tax and ensuring compliance a one-button operation.

The first part of this guide outlines the steps needed to set up the integration. It should be followed by an administrator after they have discussed they have discussed their requirements with Avalara and have set up their organisation in the Avalara administration console. If you need help getting that side set up, please contact your Avalara representative.

If your system is already configured for AvaTax you only need to pay attention to the 'Validating addresses' and 'Calculating tax' sections.

Entering integration details

The Claritum system needs to know how to connect to AvaTax before it can calculate tax. You should have been supplied with an AvaTax API URL, Company Code, Account Number and License Key by your Avalara representative.

To enter these details in Claritum, navigate to the System configuration page by clicking 'Information' > 'Configuration' in the left hand menu. Then click on the 'Invoicing' tab. You should see an AvaTax section, similar to below:

Enter the details you've been provided and click 'Save'. If you do not see this section, AvaTax may not be configured for your system yet - please contact your Claritum account representative.

Setting up the system Tax Codes

The Claritum system stores a list of tax codes buyers can choose from when ordering items and issuing invoices. It's important that these are kept in sync with the codes AvaTax uses.

To add or edit codes, navigate to the System configuration page by clicking 'Information' > 'Configuration' in the left hand menu. Then click on the 'Invoicing' tab. You'll see a section titled 'Sales Invoicing':

You should only have one tax code present - the 'Unknown' code that is displayed by default. However if you are configuring an existing system, there may be other codes already entered. You can't delete tax codes since they may be in use on issued invoices and jobs. However you can stop them displaying by setting the 'Valid to' date to some time in the past. If you are sure none are in use contact your Claritum representative and they can remove unwanted ones.

Use the 'Add' button to add each of your new codes. Enter the following details for each:

Code	The code from the AvaTax system, something like 'PD060100'
Description	The text a user will see in the drop down, ie 'Direct Mail'
Valid from	The date to start displaying this code on. If you leave this blank it will use today's date.
Valid to	The date to stop displaying ths code. Normally you'd leave this blank.
Default	Check this to make the code the default selection. Normally you'd leave the 'Unknown' code the default.

Customer configuration

AvaTax expects to receive a unique customer identifier when it's calculating tax. Before using the system, make sure your customers are configured correctly:

Exemption No	The customer's tax exemption number. Only enter if the customer is tax exempt.
External ID	Unique identifier for customer. Normally an code from your accounting package or similar. Must be set for all customers using AvaTax.

Validating addresses

Before the AvaTax system can calculate tax it needs to know exactly where something is being shipped from and to. Once you've entered your integration details above every place an address is displayed on the system will show a warning if the address has not been validated:

If an address is marked as invalid, use the 'Edit' button to correct it. When you click 'OK' the Claritum system will contact AvaTax and validate it. If there's still a problem, try hovering your mouse over the 'Invalid address' text: it should display a tooltip telling you which part of the address AvaTax doesn't recognize.

Hint: The Claritum system reuses the addresses stored for Customers and Suppliers when you are placing orders. To avoid having to fix addresses all the time, edit the address on the customer or supplier details screen. This will then fix the address in the other places it is used.

Hint: If you already have a large amount of addresses entered in the system that have not been validated it is possible for Claritum to bulk-validate them. Please contact your Claritum account manager. Be aware that this can take some time - so don't leave it until the last minute!

Calculating tax

Before a customer invoice can be approved and issued it must:

Have a valid customer address
Have a valid supplier address
Have the tax code set

Depending on your invoicing policy restrictions, you may also need to have received the suppliers' invoices for all the line items and have marked them delivered. You will see a warning if any of these conditions have not been met.

Here's an example of a line item where the tax code has not been set:

Note that there is no total values calculated. Select a tax code for each line item, then click 'Recalculate'. The system will contact AvaTax for the correct tax rates:

Once the tax has been calculated you will be able to approve and issue the invoice.