Why clean core tax compliance matters

With all the attention on artificial intelligence in the SAP ecosystem, it’s understandable to think clean core has faded into the background. In reality, clean core serves as the foundation that makes AI adoption meaningful and scalable within your SAP suite.

Clean core means running nondifferentiated business functions such as payroll, invoicing, and tax compliance on SAP standardized processes and APIs. These are universal requirements; customizing them adds cost and complexity without delivering competitive advantage. By standardizing them, enterprises free IT and finance teams to focus on what sets them apart: product innovation, customer experience, and new business models.

AI thrives on structured, consistent data. While it can function in messy environments, its value is constrained if patterns are broken by custom datasets and exceptions. Enterprises relying on heavily customized ERPs often find AI limited to isolated proofs of concept rather than enterprise-wide intelligence. Clean, standardized data within SAP is what unlocks AI’s full potential for scale, trust, and compliance. That’s why buying from vendors who respect SAP clean core principles isn’t just an IT choice — it’s an AI strategy.

This is where the Avalara and SAP partnership becomes essential. Avalara was early to reject ERP-breaking customizations for compliance, aligning instead with SAP clean core strategy. Today, Avalara Agentic Tax and Compliance™ delivers AI innovation at enterprise scale. 

Through certified integrations with SAP Cloud ERP (formally S/4HANA) built on SAP Business Technology Platform, Avalara delivers standardized tax compliance capabilities that keep core ERP processes clean.

The benefit is twofold: Businesses avoid the pitfalls of bolt-on custom tax engines while gaining compliance solutions designed to feed AI-ready data into SAP. For enterprises rolling out AI copilots like SAP Joule along with decision intelligence and automated reporting, standardized compliance helps make trusted data possible. 
 
Powered by the ALFA framework (Avalara LLM Framework for Agentic Applications), the Avalara platform combines trusted content, specialized language models, agentic middleware, and scalable infrastructure to deliver real-time compliance execution.

Avalara agents perform the work that once required entire departments of professionals. They observe, advise, and complete tasks. 

For example, an agent in an ecommerce system may want to have Avalara file tax returns. It can communicate with our lead agent, Avi, who makes sure the work is assigned to other agents that carry it out with the business’s approval.

Avi can also work solo. For instance, Avi can transform a user’s Outlook inbox into a compliance checkpoint, automatically scan inbound invoices, then digitize, validate, and route them to connected systems. Or Avi can reside in a browser to help users install connectors, recommend actions, and complete tasks. 

By using Avalara Model Context Protocol servers, Avi understands your enterprise’s compliance environment and accomplishes tasks across SAP workflows without disrupting the core system.

Avalara AI models are trained on our comprehensive tax content, which encompasses information for 190+ countries and is continuously expert verified. That same data helps fuel AI automation within SAP.

With SAP and Avalara combined, compliance becomes an enabler.

When you hear about AI in the SAP landscape, don’t just think of copilots and automation. Think of the discipline needed to make AI truly trustworthy. That discipline begins with clean core and extends to demanding standardized, integration-friendly data from every vendor. Compliance may be the most visible requirement, but the truth is broader: AI can only be trusted when every system that feeds it is clean, standardized, and aligned.

SAP and Avalara are working together to ensure enterprises can embrace AI without compromising compliance or data integrity. Clean core is not only an IT philosophy. It’s the architecture of intelligent, compliant, and AI-ready enterprises.

Learn more about how Avalara and SAP are partnering on agentic AI compliance for enterprise businesses.