General Consultant Discussion

So @WayneSchulz has always said, don't count on recurring revenue deals from SaaS vendors as a way to build value in your business. They haven't rolled it out yet and it won't be official until next week and they aren't sure what vendors it affects based on contracts and when, but it sounds like Avalara is doing away with the 10%/year recurring cut VAR's get. They tried to make this turd sound like a plus because if you sell 3 new deals in a year, your first year margin goes from 20% to 40%. But clearly they are being greedy and know their long term worth is based on how little they have to give away to the partners who bring them the business over the long haul. Worse, if you spent years building up an Avalara Client base, there is no grandfathering on this. You simply lose your recurring cut...

When/how did you hear this??

Just had a marketing planning call with Darcy. She said about 50% like the higher initial commission and 50% preferred the old way which tells me at least 50% of the channel is stupid if they think building a business based on how much they can sell new each month is a way to build a sellable company. Now, this may not apply to Sage...yet...based on the contracts. She said she won't know until its officially rolled out at the end of the week, but you can be sure, if it doesn't it will when the contracts come up for renewal IMHO

Funny, but I just received an email from a customer who bought the service early this year. He received an email directly from Avalara for their renewal, due in March. I just emailed my rep asking if this should go through Sage or not. We - in the past - have gotten our commission from Sage for this. It will be interesting to see what she says.

All software companies are just about the same level of ""evil"".

FYI - We are looking into a service that competes with Avalara that can load tables without taking over calculation at a very reasonable price, or perform calculations at a lower cost than Avalara. Should hopefully know more by MOTM.

Would the pricing be better too @GaryFeldman?

Just checked with CCH. They'll give you the same 10% that Avalara used to give you BUT... you must maintain $60k/year in new sales which is near impossible unless your a really large VAR

@Moira - The idea is to have a service that is simple and affordable, without the fear tactics. Avalara is a great service but... sometimes too much for my target customers. I have a guy doing the research for me and when I know I will post if it turns out to be feasible...

We downloaded the free Avalara tax codes from TaxRates.com and wrote VI imports into the Sage 100 tax tables. The customer uses the same rate file for their website tax calculator. It's not a perfect solution but for 3 states, it doesn't take too long. Also, it solved the sales tax variance problem for sales orders imported from their web site.

I thought Avalara licenses their tax data from CCH?

How do you know which tax schedule to use? Do they have them set up by zip code?

Yes, the tax tables come with a 5-digit zip code. There is a TaxRegionCode we use for the tax code and tax schedule (no multi-tiered tax schedules) and the combined tax rate.

FYI Avalara uses geo-location and not 5 digit zip codes as in many localities a single zip code can land in multiple jurisdictions. Here in Georgia a 30075 zip is Roswell, but although Roswell is in Fulton County, some 30075 zips actually land in Cobb County which is 1% lower tax.

5-digit zip codes are not accurate. but it is the limit that sage has provided off the shelf. I did some basic research on a few zip codes that cross over multiple tax jurisdictions and noticed the tax files provided us with the highest tax rate within the zip code.

You'd be a good Avalara salesperson @GaryFeldman !