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How TaxJar, Avalara, Stripe Tax, and Quaderno compare for sales tax compliance software

How TaxJar, Avalara, Stripe Tax, and Quaderno compare for sales tax compliance software

TaxJar vs. Avalara. Avalara vs. Stripe Tax. Stripe Tax vs. Quaderno.

These are the questions you have when you’re looking for the best sales tax compliance software to match your business. That’s because these four products are the top sales tax softwares on the market.

To help you make a choice, we evaluated each of them for the value they can offer your business on their own. And we also compared them to each other: TaxJar vs. Avalara, and so on.

Why would we compare ourselves to our competitors?

From our ten years of experience running our own SaaS company – and serving thousands of customers – we know running an online business involves hundreds of decisions. We also know complying with sales tax involves knowing and following hundreds (or thousands) of local policies and laws. You can’t possibly manage both! Who has the time or mental space?

So we decided to help you make a decision about how to automate your sales tax compliance! Two birds with one post. Let’s get started!

How TaxJar compares

TaxJar’s primary service is automatic tax reporting in the US. TaxJar collects data from your eCommerce platform and organizes it for you. As a result, you get “return-ready sales tax reports for every state.”

But if you want tax calculation, you have to put in some work. You must configure your online store (via Shopify, Amazon, etc.) to properly charge taxes in all the various states and countries where you sell. Or you can invest time and resources into TaxJar’s Sales Tax API, which you can hire a developer to set up. The Sales Tax API supports sales tax rates in the United States, Canada, Australia, and the EU. If you sell to other countries, you’re on your own again with manual tax rate configuration.

No automatic tax invoices with TaxJar

Similarly, tax-compliant invoices still fall on your shoulders. Every time you make a sale, it’s your responsibility to create an appropriate tax invoice with all of the correct customer data, send it to the customer promptly, and store the document according to local tax law (sometimes for as long as ten years, like in the EU!).

As far as integrations go, TaxJar offers just 13 integrations with e-Commerce platforms and payment processors. These may cover your basic needs. But crucially absent is an integration with Zapier, which allows you to connect all the platforms, apps, and workflows in your business, so that all of the little behind-the-scenes tasks are completely automated!

Here’s what we heard from one of our customers:

With TaxJar certain kinds of payment options weren’t showing up as transactions, so they weren’t getting carried over and Quaderno got all of them.

Jessa, online coach.

Extra service at an extra cost

TaxJar also provides a tax filing service called AutoFile, which works in select US states. You pay an extra $25 per filing. So for example, each state tax return would cost you $25 to file, every time you file – whether that’s monthly, quarterly, or annually.

How Avalara compares

It’s hard to know where to begin with Avalara. As a global, publicly-traded corporation, Avalara is a massive company with large operating costs, and so they’re focused on massive customer accounts that need complex solutions. This is a main difference in the comparison of TaxJar vs. Avalara.

Although Avalara provides many tools for automating tax compliance, there’s one main obstacle. Their product offering is not designed for small-to-medium online businesses, especially not those selling internationally. Here’s why.

Need to buy multiple Avalara products

Avalara has a few siloed products, such as AvaTax and Avalara Returns, which solve specific, separate steps of the sales tax compliance process. For example, AvaTax will automate tax calculations, and Avalara Business Licenses will manage your registrations. But to truly cover your business’ sales tax needs, you need to purchase an Avalara “Tax Compliance Suite” of products. And the pricing for that is nowhere to be found on the website! You’ll need to talk to one of their sales agents for that info.

Here’s what we heard from one of our customers:

It’s a more complicated program, but Quaderno is much easier to use overall. I think you also have much better support. Their setup was so complicated and they tried to give me the run around. They didn’t know my program (a subscription platform) that I was using and I ended up crying on the phone with them.

Danielle, digital shop owner.

Incomplete coverage and not worldwide compliance

The Avalara suite you buy will only cover one given country or region. So you’ll need to buy the suite for US sales tax, plus the International Compliance suite and cross-border products to cover any other sales. And that’s not guaranteeing that Avalara covers everywhere you sell. Last we checked, they only cover the markets of the US,Canada, EU, India and Brazil.

No automatic invoicing with Avalara

For the hefty price you’d pay (again, we’re just guessing!) to get sales tax compliance through Avalara, you’d think your business also gets automatic tax invoices. But no, Avalara doesn’t offer that service natively. You still need to create your invoices manually, or sign up for an additional tool that integrates with Avalara to automate them for you.

How Stripe Tax compares

Stripe, one of the world’s most popular payment processors, rolled out Stripe Tax in an attempt to bring tax compliance in house and provide customers a one-stop solution. While the service covers the bare necessities, it is far from meeting the needs of today’s multichannel e-commerce businesses.

Stripe Tax offers compliance with sales tax, VAT, and GST. It appears to offer everything you need, all the same things we’ve built into Quaderno:

  • Accurate tax calculation
  • Compliant tax invoicing
  • Embeddable checkout form
  • VAT ID validation for B2B sales
  • Secure storage of customer data
  • Country-by-country tax reports

But there are some serious restrictions and cost burdens involved with using Stripe Tax.

Doesn’t cover other sales channels or payment systems

With Stripe Tax, you are locked in to Stripe as a payment processor. The system only works for Stripe transactions only, leaving any other sales channels out to dry. You get tax calculations, but only for sales paid through Stripe. You get alerts about tax liabilities and access to tax reports, but they only cover one slice of your business: the sales through Stripe. Since most online businesses sell through multiple channels, this is a real limitation.

Expensive pricing structure charges you more for bigger sales

Stripe charges a percentage of your revenue for calculating taxes. That means a $50 transaction will cost 5x more than a $10 transaction. Such a pricing structure takes a big bite out of your profits, as if you’re punished for making bigger sales! At Quaderno, we charge by volume (or number) of transactions, regardless of their value.

Non-expert customer support

Stripe Tax’s customer support knows a lot about Stripe, but not much about taxes. This is something we gathered from customer feedback. If you want a better understanding of your tax obligations, for your business now and as you grow, then Stripe Tax won’t help you there.

Our take on Quaderno, maybe with a little bias

Quaderno is an all-in-one tax compliance solution with an affordable price point and a friendly UX. Tax is all we do, so we are 100% focused. We’re here to serve SMBs, SaaS, digital entrepreneurs, online stores, freelancers, hobbyists, and enterprise CFOs. Our product is for everyone, everywhere. We just want to give you peace of mind and help you grow your business.

Here are three ways Quaderno stands out from the rest.

1. Use any payment system you want for your sales.

It’s all about flexibility. With Quaderno, your business is not locked in with a single payment method or processor. You can switch payment gateways tomorrow and your invoices and taxes won't be affected.

2. Pay only by volume of transactions, not by percentage of your revenue.

We think it’s not okay to ask for a percentage of your revenue for making calculations. Why should a 10x sale cost 10x more for a tax calculation? Quaderno’s pricing plans are based on the number of transactions and tax jurisdictions.

3. Get excellent customer service from the moment your free trial starts.

We know taxes and our software, inside and out. In our experience, helping you grow your business isn’t just about building a great tool and the right integrations. It’s also about providing the best customer service possible because taxes are confusing and stressful!

Our team of humans is here to answer all your questions, no matter how small, and to make sure you’re getting your money’s worth from Quaderno.

What exactly does Quaderno do?

In every subscription plan, Quaderno provides the following:

  • Automatic tax calculations on every sale
  • Automatic invoicing
  • Tax reporting & easy filing
  • Alerts about new tax obligations
  • Storing your business’ tax registrations
  • Syncing data with your accountant

Let’s explain in a bit more detail!

Automatic tax calculations on every sale

The app performs automatic tax calculation on every sale you make, according to the product category of what you’re selling. Calculations are automatic and added at the point of sale, no matter which channels and payment processors you’re using. In fact, Quaderno offers integrations with all of the most popular platforms. If you sell on your own website, Quaderno will add automatic tax calculation to your checkout process seamlessly.

Quaderno’s database covers over 14,000 tax jurisdictions worldwide. And we stay up-to-date with tax rates and policies as they change around the world, so the rate is always accurate.

Automatic invoicing

Quaderno provides automatic invoicing for every transaction. The app will send tax-compliant receipts, invoices, and credit notes automatically, on the spot. You can also set up recurring invoices if you bill by subscription. Plus, Quaderno’s automatic invoicing offers:

  • Customizable and localized invoices. Quaderno allows you to customize invoices and receipts to match your brand. Not only that, the app creates documents in your customer’s local language and currency.
  • Self-service invoice and billing help for customers. Quaderno offers a billing dashboard for each of your customers. This self-service customer support option saves you time, money, and stress. Plus, it creates a much better user experience.

Tax reporting & easy filing

With Quaderno’s instant tax reports, you can understand your tax liability in any jurisdiction at a glance and file a return in mere minutes. The app tracks how much tax you’ve actually collected in each jurisdiction, and displays all the necessary information in one place. This makes filing tax returns a matter of data entry.

Or, if you'd rather leave tax returns to the professionals, we'll connect you with a verified tax filing service!

Alerts about new tax obligations

Quaderno monitors your tax liabilities and where your business might need to register next. The app tracks your sales in real time, no matter where you’re selling, and measures those totals against each jurisdiction’s threshold rules. Thanks to Quaderno’s threshold reports and real-time data tracking, the system will alert you when:

  • Your sales have hit 100% of the threshold (letting you know it might be go-time for tax compliance!)
  • Your business is liable for a new tax because you’ve made a sale in a new place, where there’s no registration threshold.

You’ll receive these notifications both in the app and via email. Who doesn’t love a heads up about important info? Especially when it can save you time, money, and stress.

Storing your business’ tax registrations

All of your business tax registrations are visible in one place, set up and recorded digitally. You can easily update, edit, add or remove these registrations at any time. Quaderno also stores your registration numbers and tax IDs digitally, then automatically stamps them on any receipts, invoices, reports, or other necessary documents. More on that later!

How Quaderno works with accountants

Quaderno helps accountants get their jobs done faster. We also make it easier on you, the middleman between the business data and the accountant. When it comes time to file your taxes, you can hand over reports that have all the data in a filing-friendly format. Or you can give your accountant direct access!

1. Add your accountant to your Quaderno account for free

You can add your accountant or tax advisor as a team member on your Quaderno account, at no extra cost! They can log in and download any data or reports they need directly. They cannot change any data within the Quaderno system. Simply create a role for your accountant in the settings of the app, and send them an email invitation.

2. Download reports yourself and send them as a .CSV file to your accountant

If adding your accountant to Quaderno is not an option, that’s no problem. Downloading reports and other documents from the app is very easy. For example, you can export your US sales tax report or export invoices from a specific time frame. The .CSV file is then downloaded to your device or emailed to you. Simply forward to your accountant!

If all that wasn’t enough, here’s what else you get:

  • 5-star rated customer support team
  • 15+ one-click integrations and API tools
  • VAT ID verification for B2B transactions
  • Secure storage of customer data, according to local tax laws around the world
  • Currency exchange based on official rates, always up-to-date
  • Automatic, customizable invoices in 10+ languages
  • Seamless payment options for your website or store, Quaderno Checkout
  • Collective data reports from all sales channels, platforms, and payment gateways in one easy-to-use dashboard
  • Helpful accounting reports, such recurring expenses and balance sheets

You can try all of the above for free with the Quaderno free trial. Our best-in-class customer support team is happy to help you with any questions.

Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.