General Information

Introduction

Starting with Penta 24.2, customers can choose to use Avalara's AvaTax to calculate tax amounts in Penta's Accounts Payable and Purchase Order modules. This requires establishment of a separate Avalara AvaTax account.

Integration Details

As of 24.2, AvaTax is only used for accounts payable invoices and purchase orders. Other areas of Penta (billing invoices, sales orders, inventory transfers, etc.) will continue to use jurisdictions and tax rates set up within Penta.

If the AvaTax option is on, when entering AP Invoices and Purchase Orders within Penta, tax calculations are turned over to AvaTax. Overrides of applicable jurisdictions and rates are not allowed.  Once calculated, the tax amounts and jurisdictions will show up in Penta as always.

Rules established in Penta regarding taxability will still be used.  For example, you can still indicate a job or a product is not taxable.  In that case, the submission to AvaTax will indicate that the item should not be taxed.

Penta System Options 154 (Sales & Use Tax Variance Limit) and 271 (Pay Tax as Reported on Invoice) are still respected. If the tax amount calculated by AvaTax does not match the amount requested by the vendor, these options still determine how the difference is reconciled. Penta might accrue use tax to bring the two values into alignment.

Penta entities where a jurisdiction list is maintained (Organization Units, Jobs, Work Orders, etc.) continue to allow entry of jurisdictions set up in Penta's Tax Jurisdictions & Rates window, but they will not be used for AP invoice or purchase order calculations.  The entry is still allowed in case they are needed by other areas of Penta that are not using AvaTax. 

The functionality is currently only supported for the United States and Canada.

Avalara Address Details

Avalara has a robust address navigation system to pinpoint exact GPS coordinates of addresses when possible.  If not possible, it will try to use a combination of street information and zip code information to identify the proper place.   However, some addresses will fail verification if not precise enough.  Invalid addresses may cause transactions to fail.  Penta screens have been changed so that new addresses will be checked against Avalara right away, and existing addresses will be checked during the setup process (see below) so that the client can change them before they cause problems.

Penta and AvaTax Jurisdictions

When recording tax on AP invoices and purchase orders, Penta automatically creates Penta jurisdictions corresponding to the AvaTax jurisdictions for which tax is calculated. These are distinct from the jurisdictions entered manually in Penta through the Tax Jurisdictions & Rates window which are used for tax entries in Penta other than AP invoices and purchase orders (billing invoices, sales orders, inventory transfers, etc.)

AvaTax jurisdictions differ from manually entered jurisdictions in the following ways:

• Tax rates and postal code cross references are neither allowed or required as these values are maintained in AvaTax.

• The only value that can be maintained in Penta is the account number.

• When establishing lists of override jurisdictions for various Penta entities, AvaTax jurisdictions cannot be selected.

When a jurisdiction is automatically created in Penta for an AvaTax jurisdiction, we also create a corresponding vendor. By default this vendor will not have any address or direct deposit information. If you want to remit payments to this jurisdiction, this information must be entered manually.

Setup

Customers must work with Penta to activate this functionality. Penta will require customer-specific credentials it can use to make calls into the AvaTax APIs. 

As part of the installation, all Penta addresses that could be used to determine tax jurisdictions will be validated with AvaTax. A listing of addresses that fail to resolve will be provided to the customer. If they are not fixed, AP invoice processing could encounter run-time errors due to the inability of AvaTax to calculate tax amounts.

Similarly, currency codes and country codes will be reviewed to ensure they will be recognized by AvaTax.  

Implementation Process

1. The client will work with Avalara to establish themselves as a company in the Avalara database.  Avalara will give them a production URL, default user ID and password.

2. Penta will set up connections to the Avalara "Sandbox" environment so that Penta can run scripts to validate addresses, country codes and currency codes for existing client data.  This involves the following:

   1. Setup security on the client database server to allow traffic to Avalara

   2. Create user permissions for Avalara transactions

   3. Setup configuration settings to be used by the Avalara transactions

3. Penta will run scripts to validate addresses, country codes and currency codes.  Results will be given to the client
   
   

   1. Vendor addresses

   2. PO addresses

   3. Work order addresses

   4. Customer addresses

   5. Job addresses

   6. OU addresses

   7. Warehouse addresses

   8. Fixed asset yard addresses

   9. Sales order addresses (master and billing)

   10. Country codes for all of the above

   11. Currency codes for all of the above

4. Client will use penta to fix invalid addresses

5. Penta will turn on the Avalara solution once the client is ready to turn the solution on in the PENTA application.  This involves the following:

   1. Switching the Avalara URL to the client production address

   2. Updating to use the production client user ID and password

   3. Turning on the configuration setting to make the Avalara solution active in the PENTA application.
      
      
      

Frequently Asked Questions