Navigating tax compliance complexity: How FrontStream simplified exemption certificate management

• From spreadsheets to automation — FrontStream transformed tax compliance into a seamless digital process.
• A clunky legacy system taught FrontStream not all automation is created equal.
• Switching to Avalara delivered a smooth implementation and instant efficiency.
• Automated exemption management now saves 10–20 hours and up to $4,000 every month. 

Tax compliance can feel like finding your way through a maze, especially when your finance team relies on manual processes. FrontStream, a software-as-a-service (SaaS) company supporting nonprofit organizations, understands this firsthand. Their journey through tax compliance — from manual Excel calculations to automated tax management — highlights the challenges many growing businesses face, and the relief that comes from finding the right solution.

FrontStream, which currently employs approximately 70 people spread across the United States and Canada, initially managed sales tax using a time-consuming and error-prone Excel-based system. Each time the company established nexus with another state, whether due to employee location or revenue thresholds, they manually calculated sales tax by researching the tax rate on individual state websites.

This changed significantly in January 2019, when FrontStream migrated from Microsoft Dynamics GP to Oracle NetSuite. At the same time, the landmark South Dakota v. Wayfair, Inc. decision prompted the team to reconsider their manual processes, as their tax obligations grew exponentially. With support from the company’s private equity owners, FrontStream chose to automate tax compliance — an opportunity they saw as a chance to streamline operations and prepare for growth through acquisitions.

FrontStream initially began automating compliance using another tax technology provider’s exemption certificate management system. Unfortunately, their user interface proved problematic, leading to ongoing difficulties uploading tax certificates, clunky processes, and increased manual intervention.

Realizing the solution was unable to meet their needs, FrontStream partnered with Avalara because of its technical reliability, positive industry reputation, and advanced exemption certificate management system.

When FrontStream made the switch to Avalara, their implementation experience was notably smooth, with clear documentation and consistent guidance from the Avalara team. FrontStream’s expectation of a four-week implementation timeline was largely met, providing significant relief compared to their previous struggles. Structured milestone tracking with Avalara enabled the FrontStream team to complete the implementation process without surprises, enhancing predictability and efficiency.

FrontStream uses Avalara primarily for tax exemption certificate management and returns filing. These functions have greatly simplified FrontStream’s operations, which involve managing tax obligations across multiple states, counties, and cities.

Senior Accounting Manager Thanh Nguyen highlighted the immediate relief felt upon seeing accurate calculations during user acceptance testing, seamless exemption certificate uploads, and timely, error-free returns filing. The automated approach has reduced their monthly workload significantly, saving an estimated 10–20 hours per month and around $3,000–$4,000 in monthly costs.

Beyond monetary savings, FrontStream greatly values the peace of mind that comes from Avalara compliance accuracy. Nguyen underscored the importance of this assurance, particularly in avoiding potentially disastrous audit scenarios. Although FrontStream has never experienced a sales and use tax audit, they recognize how critical it is to have accurate tax calculations, proper exemption certificates on file, and the ability to generate necessary reports on demand.

This confidence enables FrontStream to direct their resources toward strategic priorities, such as expanding their sales and marketing teams. With Avalara handling the complexities of tax management, the company is better positioned to focus on revenue-generating activities and growth initiatives.

Beyond technical capabilities, FrontStream’s relationship with Avalara has provided additional benefits through the Avalara Ambassador program. Nguyen noted the value of the program in terms of knowledge sharing, industry insights, and best practices. Ambassadors receive regular updates on tax regulations and changes, webinars, and educational resources.

Participation in the program also allows Nguyen and other FrontStream team members to earn points, convert them into rewards, and actively contribute to Avalara product development and messaging. 

Reflecting on their experience, FrontStream’s team emphasized several key lessons for other companies navigating the journey to automated tax compliance:

• Do your research. Evaluate multiple solutions carefully, comparing capabilities, costs, and potential pitfalls.
• Understand what you’re paying for. Higher costs might initially seem prohibitive, but in tax compliance, reliability and accuracy can justify investment.
• Prioritize relationships. Choose providers who demonstrate consistency, clear communication, and strong customer support. 
• Keep organized. Maintain clear documentation and structured internal processes to facilitate smooth implementations.
• Allow room for gradual implementation. Implement solutions step by step, ensuring each phase is stable before moving forward.

FrontStream plans to continue using the robust Avalara platform as they grow, with ambitions of expanding their operations. Avalara scalability assures FrontStream that no matter how large or complex their business becomes, they’ll remain compliant without significant operational disruptions.

Nguyen encapsulated the Avalara experience as integral to their internal readiness for growth, confident that Avalara will support their needs as they expand into new markets and scale operations.

The Avalara approach to managing tax compliance complexity not only delivers operational efficiency but also empowers businesses like FrontStream to focus on strategic growth and innovation — exactly where they want their limited productive hours to go.

Learn more about other companies that made the switch to Avalara.