Avalara and Thomson Reuters ONESOURCE both offer tax compliance solutions, including sales and VAT, but the tools have different areas of focus and target different kinds of companies.
Avalara and Thomson Reuters ONESOURCE are both enterprise tax solutions that offer compliance support for both sales tax and VAT. However, they serve different types of businesses and different buyers.
Picking the wrong one could mean paying for capabilities you don't need or outgrowing the tool too fast.
Avalara is best known for its sales tax and VAT automation tools. Its core products include transactional sales tax automation for ecommerce, retail, and multichannel sellers. Multiple Avalara products, including AvaTax and Avalara Returns, focus on sales tax compliance.
Thomson Reuters ONESOURCE offers a broader array of tax services, including income tax, trust accounting, and tax research. While ONESOURCE handles sales and VAT as part of its indirect tax services, this module is just one part of a larger suite of tools, and sales tax support isn't the company's core business.
This guide provides an at-a-glance comparison, then covers pricing, each service's features, who they work best for, and alternatives for companies that don't need these expensive enterprise solutions.
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The table below shows some of the key differences between Avalara and ONESOURCE:
Avalara was built specifically for transactional and indirect tax compliance, including sales and use tax and VAT. It is a common choice for ecommerce and SaaS businesses that simply need this service and don't require all the features of enterprise financial services software.
ONESOURCE offers indirect tax compliance as a module inside of a larger suite of corporate and tax accounting tools. It is ideal for companies that already use other Thomson Reuters products, such as Checkpoint, or those that need additional services such as trust accounting.
For businesses that require more limited support, ONESOURCE is a complex and expensive solution compared with Avalara. And Avalara itself is one of the more costly sales tax support solutions with a relatively steep learning curve.
Thomson Reuters doesn't publish pricing.
Avalara has public pricing information for smaller businesses, but both require you to connect with a sales associate to understand your true costs.
Avalara states that its Tax Calculation and Returns Compliance Package starts at $699 per year, but ONESOURCE provides no guidance.
Pricing can vary depending on transaction volume, services needed, and number of jurisdictions where your company has sales tax obligations. And both services generally require ongoing contracts and are known for their high prices.
Avalara pricing is not transparent because the company publishes starting prices online only for businesses under $50 million in revenue. Avalara requires a contract, and larger businesses need custom pricing.
While Avalara's Core Compliance plans bundle calculation, managed returns filing, nexus monitoring, and exemption management for businesses under $50 million in revenue, larger businesses must sign up for multiple modules to get comprehensive end-to-end sales tax support.
For example, you'd need AvaTax for tax calculation, Avalara Returns to file, the VAT returns module if you're international, and so on.
Pricing scales based on both transaction volume and the number of states or jurisdictions where you file and remit. This means your costs increase as your business grows.
Avalara offers a free trial, but there is no free tier, unlike Numeral, which always offers free nexus monitoring.
Thomson Reuters does not provide pricing. However, the company commissioned Forrester Consulting to conduct an independent research study on the cost of ONESOURCE Indirect Tax, and the study revealed that:
These costs are substantial and may be burdensome for startups or ecommerce businesses.
AvaTax offers global tax calculation services with rooftop accuracy. It calculates tax in over 12,000 U.S. jurisdictions and VAT in over 190 countries. AvaTax integrates with all your sales and purchasing systems and calculates the correct tax due in under 10 milliseconds.
AvaTax's speed and global scope can make it a better option for growing businesses expanding quickly and serving a multinational customer base.
ONESOURCE also offers real-time tax calculation, but it promises a slower response time of 40 milliseconds per transaction.
ONESOURCE covers transactional tax compliance across 205 countries and allows automation with 60+ financial systems, including ERP software, making it ideal for complex multi-entity corporate structures.
Nexus monitoring is crucial for both established and growing companies to know when you meet thresholds for economic nexus, which are related to sales volume and/or transaction numbers set by the state. Once this is triggered, your sales tax obligations begin.
Neither Avalara nor ONESOURCE offer free nexus tracking, while alternatives like Numeral provide this as a free, no-commitment service with no contracts required. Numeral alerts you as you are approaching a registration threshold and when you must register based on nexus.
Both offer nexus tracking as part of a comprehensive sales tax compliance solution when you sign a contract.
Avalara offers nexus monitoring as part of its Core Compliance service, as well as with upgraded packages that add additional support, while ONESOURCE offers monitoring through its ONESOURCE Determination and ONESOURCE Indirect Compliance services.
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Managed filing means the provider files and remits returns for you. Assisted filing means the software prepares returns, but your team reviews, files, and pays.
Avalara provides managed filing solutions through Avalara Returns. You can connect your transaction data, provide registration details in each location, and give the company authority to file on your behalf.
While Avalara prepares your returns and can file on your behalf, you still need to connect your data, set up the filing schedule, and adjust your filing locations. It is not a true hands-off solution.
Avalara's returns are powered by AI, and some users report having accuracy concerns.
ONESOURCE also prepares returns, automating over 1,200 state, county, and city returns. Data can transfer from source systems to file-ready returns, and electronic filing is available where supported.
Customers have generally provided favorable feedback about the assistance ONESOURCE provides in preparing returns.
Avalara offers more support for sales tax registration than ONESOURCE, which requires you to register manually once you establish a nexus.
Avalara requires you to complete a form and will prepare the necessary registration documents. In some cases, it sends the registration and fees to licensing authorities, but in others, it requires your hands-on support. However, customers say the guidance it provides is helpful.
ONESOURCE doesn't do this document preparation for you.
Avalara's Core Compliance plan includes exemption certificate management.
Thomson Reuters offers this through ONESOURCE Certificate Manager, a related product that integrates with ONESOURCE Determination. It handles certificate collection, validation, storage, and renewal tracking, and lets customers upload certificates through a self-service portal.
Both ONESOURCE and Avalara allow you to integrate their sales tax and VAT tools with existing software solutions, including ecommerce sales platforms, accounting systems, and enterprise software.
Avalara lists hundreds of integrations and ONESOURCE says it integrates with over 60 systems, including "enterprise resource planning (ERP), point-of-sale (POS), e-commerce systems, or other systems with ONESOURCE Determination."
Avalara's library of native integrations focuses more on ecommerce platforms, while ONESOURCE offers more options for integrations with ERP tools and accounting systems.
ONESOURCE offers prebuilt integrations for SAP, Oracle, and Microsoft Dynamics 365, while a Shopify- or WooCommerce-based business will generally find Avalara's library more relevant.
While both Avalara and Thomson Reuters suit businesses with large sales tax compliance budgets, they serve different customers.
Existing Thomson Reuters customers may also prefer ONESOURCE, as the company's indirect tax modules can be added to their existing product suite.
While both Avalara and Thomson Reuters have benefits, they also have gaps. Specifically:
These are significant shortfalls that your company must consider before deciding to use one of these sales tax solutions.
Numeral is a popular alternative to Avalara and Thomson Reuters ONESOURCE.
Like both companies, Numeral offers sales tax and VAT compliance and includes tools like a sales tax collection engine that calculates tax in real time with rooftop accuracy.
However, some key differences include the following:
If you are ready for a sales tax solution that actually makes compliance simple, get started with Numeral.
Still need to know more? Here are the answers to some frequently asked questions about Avalara vs. Thomson Reuters.
Is Avalara or Thomson Reuters better for a small ecommerce business?
Avalara can be a better alternative than Thomson Reuters for small ecommerce businesses, as Thomson Reuters solutions tend to be costly, complicated, and more comprehensive than many ecommerce businesses need. However, Avalara also still has a relatively high price and steep learning curve compared to modern sales tax solutions like Numeral.
How much does Thomson Reuters ONESOURCE cost?
Thomson Reuters ONESOURCE does not publish pricing, and you must connect with a sales associate to understand likely costs. However, a case study found that initial onboarding and three years of service cost an estimated $873,600.
Does Avalara offer a free trial?
Avalara offers a free trial, but it doesn't offer an ongoing free plan. By contrast, competitors like Numeral offer free nexus monitoring available for as long as you need it, with no commitments or long-term contracts required.
What's the difference between Avalara and Thomson Reuters?
Avalara was designed primarily as a sales tax and VAT compliance tool. Thomson Reuters offers a full corporate tax suite. While both come with high costs, Thomson Reuters tends to be more expensive than Avalara but offers more services.
Can I switch from Avalara or Thomson Reuters to another provider?
You can switch your sales tax and VAT compliance partner from Avalara or Thomson Reuters. You will typically want to export your data so you can bring it to your new provider. You will also need to update your integrations with your new service. It can be best to time this process strategically, so you make the switch when a filing period has just closed.
Which platform has better customer support?
Both Avalara and Thomson Reuters get mixed reviews from customers, with commentators complaining about high costs and complexity. Some customers have also expressed concern about challenges in getting high-quality service and customer support from Avalara.
Still not sure what's best for you? Check out some of our other comparisons:
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The trusted solution for U.S. sales tax, VAT, and GST compliance, used by 3,500+ global businesses.
