Avalara QuickBooks Desktop: How to Use Sales Tax Integration for QuickBooks Online and Desktop?

Avalara QuickBooks Desktop: How to Use Sales Tax Integration for QuickBooks Online and Desktop?

Sales tax integration with QuickBooks helps you to prepare returns, calculate rates, manage exemption certificates, etc. You can perform all these tasks directly from the accounting software once integrated with Avalara. There are other advantages of using Avalara QuickBooks Desktop or Online such as better accuracy for rates and easy management of tax rules. Other products such as Avalara AvaTax can be very helpful to handle sales tax. 

Remember, the procedure of connecting AvaTax with QuickBooks can be different for desktop and online versions. QBDT requires you to perform a series of steps for a successful integration while it is quite easy with QBO.

Advantages of Avalara QuickBooks Integration

To automate tax calculations for the business, setting up AvaTax QuickBooks Integration is the best choice. Not only this, Avalara integration with an accounting system offers a large number of benefits for your business. With these benefits, you can cut down the manual work and have better access to tax responsibilities. There are other advantages as well such as:

  • It lets you calculate customers’ taxes regardless of their sales channel or location.
  • With Avalara QuickBooks integration, you can have better access to tax duties in every state.
  • It helps you to ease the manual or complicated methods of using custom solutions.
  • It removes the manual process of remittance and filing.
  • This improves accuracy for rates and also reduces the returned shipments.
  • You can easily manage the tax rules beyond the product inventory.
  • Avalara and QuickBooks let you streamline the accumulation of the omnichannel transaction data for sales.
  • QuickBooks can easily function to manage exemption certificates.
  • By validating the tax-exempt sales, you can also reduce the audit risk.
  • Also, you can perform with different business systems that you are already using.

Note: Avalara supports other versions of accounting systems such as QBDT, QB Enterprise, QBO, and QBO Advanced.

Products for Avalara QuickBooks Desktop/Online

There are a few products that empower sales tax in QB. It includes Avalara AvaTax, Avalara Returns, and Avalara CertCapture. Each product serves a different performance for sales tax and boosts functionality. One of these provides cloud-based sales while others are beneficial for file and managing sales.

  • Avalara AvaTax offers cloud-based sales. It uses comprehensive tax calculation. In addition, the updated tax rates go to the invoicing system regularly or to the shopping cart automatically.
  • Avalara Returns prefers to use the sales data to create or file the sales. It also uses tax returns & submits payments across different jurisdictions in each filing cycle.
  • Avalara CertCapture is an expandable solution. It securely stores, collects, and manages your tax documents such as W-8s, W-9s, and exemption certificates, in the cloud. This also helps you to access all the documents quickly when required.

How Does Avalara Integrate with QuickBooks Desktop?

As stated earlier, you can use different products offered by Avalara. For instance, you can use Avalara AvaTax to automate calculation, Avalara Returns to automate filing, and Avalara CertCapture to automate documentation.

By connecting the relevant product with Intuit software (QB), you can automate your tax calculation for the business. Keep in mind, you can also use WePay QuickBooks integration to automate payments.

However, to calculate the sales tax of your business using AvaTax, you will have to perform some steps. Avalara QuickBooks Desktop requires you to create the company profile, connect QuickBooks to AvaTax, adjust the company profile, test the setup, and set up returns.

Step 1: Prepare the Basic Company Profile

If you have not created the company profile or want to add the additional one, make sure it is done before you calculate the sales tax. An AvaTax basic company profile consists of key details regarding your business. These details determine the following:

  • How your tax is calculated.
  • Where you collect your taxes and pay taxes.
  • Product and services that you sell.
  • Where you sell the products and services.
  • Customers that you exempt from tax.

Note: In case you are not the one who is setting up the company profile then give access to another person who can set it up. Make sure you set the appropriate permission when adding another user.

What to Do to Prepare the Company File?

While preparing the company profile, you have to describe a little about the company. You can mention where you are registered to collect taxes and pay taxes. In addition, you need to collect the details required for setting up the company. It includes the legal company name, taxpayer ID number, business ID number, and the company’s primary address.

  • To start off, add the company details such as tax ID numbers and the company’s address.
  • Then, you need to specify where you collect taxes and pay taxes. For this, you need to add the states, countries, and local jurisdictions where you are registered to collect taxes and pay taxes.
  • After this, you will have to verify the jurisdictions and then activate the company. All you have to do is make sure that the details are correct such as your tax types, tax ID numbers, the effective date for every jurisdiction, and where you collect taxes and pay taxes.
  • Once done, you can enter other company locations for the location-based filing. In other words, if you want to file returns based on the location reporting requirements then you can specify other company locations as well.
  • At this point, you can mention the marketplace to the company profile. You can do this when you don’t prefer to use an extractor and you are selling through marketplaces such as Etsy, eBay, or Amazon then you should add it to the company profile.

Remember if you are having more than one company for your business then you can add the additional company profile any time from the Settings menu.

Step 2: Connect Your QuickBooks Desktop to AvaTax

After creating the company profile, you can connect the business app to AvaTax using the integration process. This will help you to get the transactions that flow to AvaTax to calculate the sales tax automatically.

Make sure you log in to QuickBooks Desktop as an administrator when connecting your business app to AvaTax.

  • First of all, download and install your integration software that will enable the connection between AvaTax and QuickBooks Desktop.
  • Then, you can add the account details so that your transactions can go to AvaTax for calculating the tax.

After installing the connector and establishing the connection between QuickBooks and AvaTax, you can fine-tune the company profile.

Step 3: Adjust the Settings for the Company Profile

Once done setting up the company file and connecting the business app to AvaTax, you may have to make further adjustments. The settings of the company profile depend on whether you are having exempt customers or what services and products you sell.

To fine-tune the company profile for successful Avalara QuickBooks Desktop integration, you will have to review where you collect or pay taxes and make other necessary changes.

  • For instance, if you have to file based on location or you sell through an online marketplace such as Amazon then you have to confirm the company locations.
  • Then, you can map the products to Avalara tax codes in QuickBooks. All you have to do is make sure that the customers are not overpaying the sales tax. Please remember that the taxability of a few products may vary depending on the jurisdiction. It includes products like food, clothing, pharmaceuticals, downloadable content, etc.
  • Once done, you can review the options for exempting the customers from tax. Here, you can manage the sales and the exemption certificates. However, you can skip this step if you don’t have any exempt customers.

By reviewing and implementing the necessary actions, you can easily adjust the settings for your company profile.

Step 4: Test the Setup

Once done setting up and making the necessary adjustments, the next step is to test this setup. This will help you to preview the tax calculation. It also makes sure that your connection is properly working. To test the step, you will have to use the tax calculator, create a test transaction, and send it to check the workflow.

  • To get started with the test purpose, use your tax calculator. By doing so, you can preview the tax calculations and addresses.
  • Then, you can prepare the test transaction in AvaTax. This will help you to know that the transactions are linked with the relevant company locations for the location-based filing.
  • Once done, you can send a few transactions so you can validate business workflows and scenarios.

By performing the necessary actions, you can test the transactions and everything you have set up for the company profile.

Step 5: Set Up the Returns

Although this step is optional, you can still use it if you have previously purchased returns. In case you use Returns for the small business then you will have to schedule the returns. On the other hand, if you use another version of the Returns then you need to import transactions if required. Thereafter, you can schedule the returns and send them to the compliance team to review. After setting up the integration and testing the accounts, you can contact the Avalara customer center or implementation specialist so they can copy the setup to the production account.

How to Use Avalara QuickBooks Online Integration?

Integrating Avalara with an online version of the accounting system is easier in comparison to a desktop. To connect QuickBooks Online with AvaTax, you are only required to activate the company profile in AvaTax. Thereafter, you can continue installing the Avalara Connector. After doing so, connecting the QBO to Avalara AvaTax becomes easy.

Step 1: Installing Avalara Connector

Avalara QuickBooks Online integration requires you to install the Avalara Connector. All you have to do is find the Avalara AvaTax through the QB Apps menu. Keep in mind, Avalara has other products also so make sure you only select Avalara AvaTax and connect it with QBO. Thereafter, you can continue doing other tasks such as granting permission.

  • First off, login to “QuickBooks Online”.
  • Then, click on the “Apps” option.
  • Here, you can search for “Avalara” through the “Find Apps” page.
  • Once you find “Avalara AvaTax” in the search result, click on it to open the app.
  • When you are on the “Overview” page, select “Get app now”.
  • Now, click the “Connect” button on the “Avalara-QBO connect page” option. Please remember that by clicking on the Connect button you also grant AvaTax permission to access the details in the QuickBooks Online.
  • After that, go to the “Avalara AvaTax for QBO” page then click on the “AvaTax Sign-in” option. Here, you will see the sign-in page.

After successfully installing the Avalara Connector with QuickBooks Online, you can continue connecting QBO with Avalara AvaTax.

Step 2: Connecting QuickBooks Online to Avalara AvaTax

To properly connect QuickBooks Online AvaTax, you just need to provide the appropriate details so your transactions can be sent for the tax calculation. For this, you will have to sign in to the account, open the connector settings, select the appropriate company, and apply the correct integration setting.

  • Log in to the “AvaTax” account. Here, you will see the “QuickBooks Connector Settings” screen.
  • Go to the “Avalara Company” option and choose the company that you need to link with AvaTax.
  • Once done, you can go to the “Integration Settings”. Then you can check the settings.
  • After that, click the “Save” button.
  • Here, click on the “Return” option.
  • Now, you can return to “QuickBooks Online”.

Thereafter, you can send your transaction for the tax calculation. If you want to customize the way that QBO interacts with AvaTax, you can check the connector settings for QBO.

Summing Up!

Alvara can be used to automate your tax calculation. With Avalara QuickBooks Desktop and Online integration, it helps you to prepare returns, calculate rates, manage exemption certificates, etc. Moreover, Avalara offers other products through which you can automate filing and documentation.

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