## Zoho Inventory Documentation Index Access the complete documentation index at: https://www.zoho.com/ca/inventory/llms.txt Use this file to discover all available documentation pages before proceeding. # Integrate Zoho Inventory With Avalara AvaTax The Avalara integration in Zoho Inventory is an alternative to the manual method of determining and associating sales tax rates to your transactions. #### Guide Layout: * [Why go for Avalara?](/ca/inventory/help/integrations/avalara-integration.html#why-go-for-avalara) * [The way it works](/ca/inventory/help/integrations/avalara-integration.html#workflow) * [Integrating Zoho Inventory with Avalara](/ca/inventory/help/integrations/avalara-integration.html#integrating-zoho-inventory-with-avalara) * [Prerequisites](/ca/inventory/help/integrations/avalara-integration.html#prerequisites) * [How do I find my Avalara credentials?](/ca/inventory/help/integrations/avalara-integration.html#avalara-credentials) * [Setting up integration](/ca/inventory/help/integrations/avalara-integration.html#setting-up-integration) * From the Integrations module * From the Taxes module * [Impact of Avalara on taxes across different modules](/ca/inventory/help/integrations/avalara-integration.html#avalara-tax-rates) * [Items](/ca/inventory/help/integrations/avalara-integration.html#items) * [Contacts](/ca/inventory/help/integrations/avalara-integration.html#contacts) * [Transactions](/ca/inventory/help/integrations/avalara-integration.html#transactions) * [Taxes on shipping charges](/ca/inventory/help/integrations/avalara-integration.html#taxes-on-shipping-charges) * [Applying discounts](/ca/inventory/help/integrations/avalara-integration.html#applying-discounts) * [How to manually sync unsynced transactions?](/ca/inventory/help/integrations/avalara-integration.html#manual-sync) * [Disabling integration](/ca/inventory/help/integrations/avalara-integration.html#disabling-integration) * * * ### Why go for Avalara * For rapidly growing businesses constantly discovering new customers, it’s not feasible during every transaction to research and obtain the right tax rate that needs to be specified. * With the new Avalara integration, Zoho Inventory now, * fetches the right tax rates and exemption reasons for all your transactions. * automates your final tax calculations. Learn more about automating your tax calculation by accessing [Avalara’s video library](https://www.avalara.com/us/en/learn/videos.html). * * * ### The way it works ![Workflow diagram of avalara integration](/inventory/help/images/settings/zom-avalara-flow.png) * * * ## Integrating Zoho Inventory with Avalara #### Prerequisites 1. Avalara integration is only available for organizations whose country is the U.S or Canada in Zoho Inventory. 2. Make sure you have an account in Avalara. You can create tax codes for your organization there and use these later in Zoho Inventory. 3. You will need the credentials provided there (such as _Account number_, _License key_ and _Company code_) to set up the integration here. If no company code is provided, the default company in Avalara will be integrated with Zoho Inventory. #### How do I find my Avalara credentials? * [Click on this link to learn how to get your company code](https://help.avalara.com/004_AvaTax_Integrations/002_All_About_Company_Codes) * [Click on this link to find out how to obtain your Avalara License key](https://help.avalara.com/kb/001/How_do_I_find_my_license_key%3F) #### Setting up integration You can set up this integration in two ways: **From the Integrations module** ![Setup Avalara from Integrations](/inventory/help/images/settings/avalara-setup-1.png) * Sign into your Zoho Inventory account. * Navigate to the **Integrations** module from the sidebar. * Select the **Avalara** tab. * Click on the **Connect** button. ![Avalara setup pop-up](/inventory/help/images/settings/avalara-setup-3.png) * A pop-up requesting Avalara credentials will appear. * Enter your Avalara credentials. * Click on the **save** button to get started. **From the Taxes module** ![Setup Avalara from Taxes](/inventory/help/images/settings/avalara-setup-2.png) * Sign into your Zoho Inventory account. * Click on the gear icon(_Settings_) on the top right corner. * Select **Taxes** from the dropdown. * Now, click on the **Use Avalara Integration** button in the top right corner. ![Avalara setup pop-up](/inventory/help/images/settings/avalara-setup-3.png) * A pop-up requesting Avalara credentials will appear. * Enter your Avalara credentials. * Click on the **save** button to get started. ##### End Result ![Avalara Success](/inventory/help/images/settings/avalara-success.png) * * * ## Impact of Avalara on taxes across different modules #### Items With Avalara integrated, you are no longer required to manually mark an item as either _Taxable_ or _Non taxable_. Instead, simply enter **Tax Codes** for each item. To do this, * Navigate to the **Items** module in Zoho Inventory. * Create a new item by selecting either the quick create(**+**)button or the **+New** button. * Under the **Tax code** field, reproduce the appropriate tax code for that item as provided by Avalara. * Select _Sales_ under **Account**. All transactions involving this item will now be tracked with this account ![Tax codes for an item](/inventory/help/images/settings/avalara-item.png) Once a tax code is associated in Zoho Inventory, Avalara will use a combination of this and the address of the customer to determine the taxability status of the item (_tax exempt, partially_ or _fully taxable_) in your customer’s location. > **Note :** You can add/change the tax code for an item from while creating a new transaction, from the tax code field in the item line. * * * #### Contacts * Click on the **Contacts** tab in Zoho Inventory. * Select the **+** button or the **+New** to create a new contact or edit an existing contact. * Provide a _valid address_ for the customer under the **Address** sub tab, ensuring authenticity in the _street name_ and _zip code_ that you provide. * If the customer is _tax-exempt_, enter the _exemption number_ or select an _entity code_ under the **Tax and Payment Details** sub tab before saving the contact. You can also create a new entity code from here. ![Entity code/exemption number for contacts](/inventory/help/images/settings/avalara-contact.png) * Contacts located outside the USA (such as the European union) are eligible for VAT handling. When a currency apart from **USD** is selected for a contact, you will be asked to specify the country and **VAT ID**. This information is used to handle all VAT calculations for this contact. Similar to item creation, you no longer need to research a customer’s address and taxability status and manually associate a tax rate. It will be provided for you **automatically** based on the parameters you specified during creation as explained below, * **Address** : Providing a valid address which Avalara can verify using _geolocation_ technology will ensure that you’re fetched the exact tax rates pertaining to the customer. If the address of a customer is not verified, the contact details will contain the text _Not verified_ below the address. The tax rates will still be fetched using the zip code instead, although categorical accuracy cannot be ensured. [Read more on why geolocation technology is so much more effective than zip codes in obtaining tax rates.](http://www.avalara.com/learn/whitepapers/zip-codes-the-wrong-tool-for-the-job/) * **Exemption number/Entity code** : If you’re dealing with a customer who does not need to pay sales tax (say a representative of a _religious_ or _charitable_ organisation), you can simply add or select the right entity code from the list corresponding to the exemption status of the customer. Alternatively, if the customer possesses an exemption certificate issued by the government, the number on that certificate i.e the _exemption number_ will suffice to make that customer exempt from all tax calculations in Zoho Books. * **VAT ID** : Tax rates of contacts located outside the United states will be fetched and stored using the VAT ID and country details provided during contact creation. > **Note :** You can change the entity code, exemption number or contact address anytime within a transaction, right from their respective fields before saving the transaction. * * * #### Transactions Let’s see how this affects a transaction. Sales tax in Zoho Inventory is calculated on all Sales entities such as _Invoices_ and _Sales Orders_. When you raise such a transaction for a customer, select the item and save it, Avalara does the following : * Determines the item’s taxability in the customer’s location. * Determines if the customer is taxable or not. * Fetches precise tax rates for the transaction by mapping to the right jurisdiction in that location. Like mentioned above, you can always change the item and contact tax criteria from _within_ a new transaction as well. This is handy for isolated transactions where you might need to make a normally taxable customer tax exempt, or you’re shipping to a different address for a regular customer. Such changes will not be saved for future transactions unless you choose to do so. ![Create transaction](/inventory/help/images/settings/avalara-order.png) If a transaction fails to sync with avalara for some reason, you will be able to find a option to manually sync that particular transaction just above the order. * * * #### Taxes on shipping charges Shipping charges are generally taxable if the item being shipped is taxable. While creating a transaction, shipping charges needs to be entered as a _line item_ if you’ve enabled Avalara integration. To do this, Create the shipping charges as an item. This means you can include it during any transaction and just vary the charges accordingly. * Navigate to the **Items** module in Zoho Inventory. * Create a new item without inventory tracking tracking. * Enter item name as ‘Shipping charges’ and provide the tax code mentioned for shipping and freight charges in Avalara. * Select _Shipping charge_ under **Account** to track all your shipping charges in one place. * Henceforth you will be able to add this item to all your sales orders and invoices and have the charges reflected along with the correct tax. * * * #### Applying a discount A discount rate cannot be entered while Avalara integration is enabled, although you can enter a flat discount fee that will be applied on the whole transaction. This amount will be _split proportionally_ among the items in the transaction, except the shipping charges if any. * * * ### How to manually sync unsynced transactions? On integrating with Avalara, all your orders and invoices are going to be synced with them automatically upon creation. But there are a few instances where they may fail to sync with Avalara. Our studies have indicated the most common causes as the absence of a billing address for a contact or having an unverified billing address for a contact. You can still initiate a manual sync for such orders after updating the necessary information. To do so: * Navigate to the concerned transaction. * Above that particular transaction, you will notice an error banner which will also have the **Sync Now** option. * From your end, ensure that the customer has a valid billing address. * Now click on the **Sync Now** option. * Doing this should take care of the sync process and automate your tax calculation. * If the problem persists, contact [support@zohoinventory.com](mailto:support@zohoinventory.com) and we will give you a hand. * * * ### Disabling integration Integration with Avalara can be disabled anytime by either going to _Settings - Taxes_ or by simply navigating to _Avalara_ under the _Integrations_ module and clicking on the **Settings** button next to your credentials. Integration can be disabled at the following levels, * **Disable Address Verification** - Address of your contacts will not be verified by Avalara to ensure accurate tax rates. * **Disable Tax Calculation** - Taxes will not be calculated on any transaction created once this option is chosen. * **Disable Avalara Integration** - The integration with Avalara is disabled and you can revert to using the sales tax rates created in Zoho Books. Also, you can choose the address for which the tax is applicable by clicking on **Change** against the option **Applicable For**. Select either **Use Billing Address** or **Use Shipping Address** and click **Save**. If an invoice is created after changing this setting, the address used for tax calculation on sales transactions will be based on the chosen address. ![Disable integration](/inventory/help/images/settings/avalara-settings.png) > **Note :** While Avalara integration is disabled, you can no longer edit or send out any transaction created using data from Avalara.