Dylan’s Candy Bar: A suite for the sweet

Dylan’s Candy Bar is no ordinary sweet shop. It’s a confectionary experience combining all things candy with fashion, art and pop culture. It offers over 7,000 sweets and sweet-related gifts from around the world.

Dylan’s rapid expansion into new product lines and distribution channels exponentially increased the complexity of its tax accounting. Product taxability varies by location, and the team has to know where their sweets are classified as food and whether a clothing item qualifies as a luxury goods item. The company’s omnichannel strategy introduced additional complications and potential for error.

As the business grew, so did the challenge of keeping up. And to make matters even more challenging, their systems didn’t talk to each other – GL, inventory and POS systems were completely disconnected.

The accounting team had been calculating taxes, filing in each state and managing exemption certificates for hundreds of customers, essentially by hand. Auditors found Dylan’s books such fertile ground for back taxes, penalties and interest that they came back year after year – New York state alone audited the company on an annual basis from 2006 to 2012.

"It was really gruelling,” says Lois Browne, the company’s vice president of finance. “Every time an auditor came in, we’d have two people completely dedicated to that for at least three weeks. Our exposure was so high that we couldn’t afford not to prioritise it.”

Dylan’s Candy Bar quickly saw Avalara as the right choice for automating sales tax calculation, managing exemption certificates and filing returns. 

Avalara AvaTax applies sales tax as the transaction takes place, using continuously updated rates and applying them at the point of sale. As the company grows, AvaTax can easily determine sales tax for new locations. 

Transaction tax data from AvaTax is provided to Avalara Returns, which automates returns preparation and enables filing in every jurisdiction. It also consolidates returns payments.

And finally, Avalara CertCapture helps Dylan’s Candy Bar manage exemptions with ease and confidence. Exemptions are only allowed when a valid certificate is available. Certificates are stored in the cloud and are easily searchable by line item if required in an audit. Expiries and renewals are tracked automatically, and reports highlighting exposure from missing certificates are sent automatically via email.

Avalara connects directly with NetSuite, which Dylan’s had implemented as its ERP.

“The implementation of Avalara’s solution was really seamless and user-friendly,” says Lois. “It was a simple, turnkey process, and when we have questions, the team at Avalara is very responsive.”