Growth made easier for Duo by Avalara

Founded in 2015, Duo provides user-centric two-factor authentication, endpoint remediation, and secure single sign-on tools. The company operates with the belief that their services should be easy, effective, trustworthy, and enduring.

When Duo more than doubled revenue for four consecutive years and quadrupled its user base, such a steep growth curve had tax implications. Their team had to research tax rules, rates, and filing requirements whenever they registered in a new state. In addition, each new state increased the time and effort required for the tax team to handle monthly sales tax filing. Tax compliance created a growing burden on Duo’s staff, preventing them from focusing on more strategic projects.

In addition, the company began upgrading its internal systems from small-business software to enterprise-grade solutions, and the need for flexibility to integrate with new solutions became more critical.

Avalara’s cloud-based solution includes built-in tax rules and rates, minimizing the tax research work required when Duo’s nexus liability expands. 

Duo also chose Avalara Returns to offload their sales tax filing burden. They needed an integrated solution that manages the entire process including returns filing, payments, and notice management.

“We started using AvaTax with QuickBooks in 2015, just to do our tax calculations,” says a tax analyst at Duo. “At that time, we were self-assessing and filing our taxes manually.” 

In 2016, the company began the switch from QuickBooks to Sage Intacct. “The tax setup was the easiest part of the Sage Intacct implementation,” they recall. “We just pushed all taxability decisions to AvaTax. In fact, Avalara was the easiest part of the transition.”

In addition to constantly acquiring customers in new states, Duo is always evaluating voluntary registration in some states, just to be on the safe side. “Once the decision is made, we can turn on nexus, and begin collecting and filing, with the push of a button,” says the analyst.

Automation to the rescue
By streamlining the tax calculation and filing processes, Avalara has liberated Duo’s tax team to focus on higher-value activities. In fact, by automating sales tax calculation with AvaTax, Duo estimates they’ve saved roughly a half million dollars.

“We spend more time on analysis, and less on transacting and processing taxes,” they say. “Filing returns, by itself, can bog a team down for most of a month. During that cycle you can’t do any meaningful analysis or reconciling or implementation of internal controls, much less take a day off.”

Peace of mind is priceless
The team also rests easy when it comes to the risk of audits. Duo sells SaaS and tangible media with software, and the taxability of their products varies from state to state. “It’s great that Avalara understands those nuances,” says the analyst. “Avalara’s reports are designed to satisfy an auditor’s expectations. So when or if an audit comes, Avalara gives us much greater confidence in the outcome.” 

That kind of confidence is a level above mere optimism. “We’re growing so fast, and Avalara’s ability to scale with us has been essential,” they say. “We’re in the process of rolling out Salesforce and Recurly, which will both integrate with AvaTax. We’ll be able to rely on Avalara as we continue to scale and grow.”