Few corners of corporate finance generate as much low-grade misery as sales tax.
The rates change, the rules differ in every jurisdiction and the work — looking up, reconciling, filing — doesn’t produce work that anyone else in the company can see. The usual answer is to buy software and stop thinking about it.
FrontStream tried an automation software to solve this, but then, it had to think about taxes harder than ever — and it called a do-over. This is how they picked it up, and learned from it.
The spreadsheet years
FrontStream sells fundraising, auction and payment software to nonprofits, schools, corporate giving programs and others across the U.S. and Canada. Its customer base is mostly tax-exempt, which means the company must collect and keep current on an exemption certificate for nearly every customer — in every state where it has a tax obligation — or carry the liability itself in an audit.
For years it handled this the way most growing companies do: in Excel.
“As we expanded into additional states, we had to research tax rates manually, track nexus exposure ourselves, maintain exemption certificates separately and prepare filing through spreadsheets and internal reconciliation,” Thanh Nguyen, senior accounting manager at FrontStream, tells TechInformed.
The spreadsheets got longer after the 2018 South Dakota v. Wayfair ruling, in which the U.S. Supreme Court overturned the “physical presence” rule. The decision allows states to require remote sellers to collect sales tax even if they have no physical location there, provided they meet certain sales thresholds — the “nexus” Nguyen refers to. Every new state FrontStream sold into was another set of rates to track and certificates to chase.
“At the same time, FrontStream was growing and preparing for future scale, so we knew the manual approach would eventually become unsustainable and introduce compliance risk,” Nguyen explains.
“The tipping point was realizing that sales tax compliance was becoming too complex and time-consuming to manage efficiently without dedicated automation.”
The first fix
So FrontStream did what many companies do. It bought a tax automation product. It was supposed to retire the spreadsheets, but instead it created major inefficiencies in certificate management and system performance, generating more work for the finance team rather than less.
According to Nguyen, the certificate management tool was clunky, uploads were inconsistent and the system added manual work. The finance team spent significant time manually validating certificates, chasing missing or expired documentation, troubleshooting upload problems, reconciling filing data across jurisdictions and checking tax calculations by hand.
“After our first implementation fell short, we became much more focused on operational reliability and day-to-day usability rather than just feature lists,” Nguyen says.
Within the same year, the company replaced the product and started afresh.
This time, FrontStream prioritized reliability and calculation accuracy, ease of managing exemption certificates, seamless integration with Oracle NetSuite and a good user experience for the finance team. It also wanted responsiveness and clear communication during implementation, as well as scalability as FrontStream continues to grow.
It landed on Avalara, a tax compliance software provider headquartered in North Carolina. But a second implementation in a year meant asking a beleaguered finance team to start over. Switching platforms again brought on what Nguyen calls “change fatigue.”
“Implementing a second solution so soon required additional time and coordination across teams,” he says. “But because the pain points with the original system were so visible, there was strong internal alignment around making the change quickly rather than prolonging the issue.”
What the second tool had to get right
Exemptions allow certain buyers, such as qualifying nonprofits, to skip sales tax on some purchases. But the seller must hold a valid certificate to prove it, and the rules on who qualifies and how long a certificate lasts vary by state. A missing or expired certificate can leave the seller liable in an audit.
So for a company whose customer list is mostly exempt, certificate management isn’t a side feature. It’s the job.
Danny Fields, chief technology and customer operations officer at Avalara, tells TechInformed that’s exactly where finance teams feel the strain.
“For finance teams, reliability and usability are critical because certificate management sits directly at the intersection of compliance risk and customer experience.”
He says Avalara reduces manual intervention through centralized validation, automated tracking and standardized workflows that scale across jurisdictions.
“That includes capabilities like guided certificate collection, automated expiration monitoring, real-time validation logic and direct linkage between exemption documentation and transaction records.”
Fields adds that AI agents also help after go-live, continuously monitoring incoming transaction data and flagging anomalies before they reach filing — and therefore giving finance teams early warning rather than a post-audit surprise.
For FrontStream, certificate management went from reactive and labor-intensive to centralized, Nguyen says.
“Certificate collection, storage, validation and renewal tracking are significantly easier to manage, and the visibility across customers’ records is much better,” he says.
Counting the return
FrontStream estimates it saves 10–20 hours a month on manual labor, equating to around $3,000 to $4,000 saved per month in equivalent staff time, and the company says it has reduced compliance risk.
Fields says customers increasingly judge automation by operational efficiency and scalability as well as compliance, and that Avalara works with them during sales and renewal to quantify time savings.
“For many companies, saving 10–20 hours per month translates into meaningful productivity improvements, but the broader value is enabling the finance organization to scale without adding proportional administrative overhead,” says Fields.
The return often becomes clear, he adds, when customers weigh the cost of manual processes, delayed workflows and compliance risk against the gains from automation, which can include lower audit exposure, greater confidence in tax calculations, faster onboarding to new jurisdictions and more time for strategic work.
Automation alone does not guarantee efficiency
Looking back, Nguyen says the experience showed that automation alone does not guarantee efficiency — and that the first time around, FrontStream was evaluating the wrong things.
“During the initial process, we probably focused too much on high-level functionality and not enough on the actual day-to-day user experience for the finance team.”
In hindsight, the warning signs were there: a less intuitive interface, gaps in exemption certificate workflows, limited confidence during testing, more manual intervention than anticipated and inconsistent behavior during uploads and validations.
“If we were doing it again, I would spend even more time on real-world workflow testing and involve end users earlier in the evaluation process,” Nguyen says. “I would also place greater emphasis on implementation support, product maturity and long-term operational reliability, not just pricing or feature comparisons.”
For FrontStream, the sunk cost of the first tool turned out to be cheaper than the cost of living with it.