Avalara has introduced a suite of artificial intelligence (AI) features intended to streamline tax and compliance workflows and facilitate integration with enterprise systems globally.
The company has announced the availability of Avi, its AI agent, embedded within user environments, alongside Model Context Protocol (MCP) servers and other AI-powered capabilities, designed to help organisations reduce compliance-related filing times and risks, while supporting company growth efforts.
Compliance integration
With the deployment of these new tools, organisations can embed compliance processes directly into their established workflows. Avi, Avalara's AI agent, is accessible through various platforms including browsers and Microsoft Outlook, where it can guide users through enterprise resource planning (ERP) configurations, assist in real-time compliance scenarios, and respond to standard compliance queries utilising Avalara's tax content resources.
The Outlook integration enables the scanning, digitisation, and validation of incoming invoices for taxes, duties, tariffs, and certificates, with the results automatically integrated into ERP systems. This aims to reduce invoice processing costs and detect compliance risks sooner.
"Compliance is no longer a back-office burden, but a mission-critical function," said Scott McFarlane, CEO and Co-Founder of Avalara. "With Avalara's agentic solutions, our customers are cutting filing times from days to hours, reducing compliance risk, and freeing teams to focus on growth."
MCP servers and system connectivity
The introduction of MCP servers facilitates connections between external agents or systems and Avalara's platform, enabling more seamless application integration through accessible APIs. This supports the evolution of compliance into an interoperable framework that extends across enterprises and geographies.
Avalara says its operating model leverages MCP servers, large language models (LLMs), specific language models (SLMs), AI agents, and a broad compliance content network within a multi-cloud setup, aiming to reinforce reliability and scalability. The infrastructure is designed to enable applications to connect and extend Avalara's compliance functions, reflecting global business needs.
Expansion of AI features
The company has also released a series of new AI-based features. Advanced Rules with AI Visualisation allows users to create and adjust compliance rules using natural language prompts, monitor logic, and receive recommendations from the AI system. This is intended to give compliance teams greater speed and precision in their work.
Avalara's reporting tools now feature embedded AI that surfaces anomalies, trends, and delivers tailored reports and visualisations. The reporting function aims to shift companies from merely reacting to compliance requirements towards proactive management.
Another addition is AI-driven global e-invoicing, which uses AI technology to automatically map standardised invoice fields onto country-specific requirements. This feature provides visual mapping tools, requiring minimal adjustments by organisations, helping speed up global compliance and improve accuracy for cross-border operations.
Additional AI-powered capabilities include exemption certificate validation, cross-border classification of harmonised system (HS) codes and detection of trade restrictions, generative tax research answers with authoritative citations, and property tax functions using AI-driven asset classification and geography assignment. These features are designed to help avoid audit liabilities, navigate international trade requirements, and improve research efficiency.
The impact of these enhancements has been highlighted by organisations using the platform. Dakota Cox, Accounts Payable at Averitt Express, stated: "The AI-powered search in Avalara Tax Research has been a game changer, cutting my research time by more than 80 percent."
Ecosystem and market rollout
Avalara is facilitating the adoption of its new AI tools through registrations of Avi in enterprise agent registries such as Google AgentSpace, making its compliance capabilities accessible across different business environments. MCP servers are also being registered in popular cloud marketplaces for broader reach.
The company is involved in direct engagement with partners and customers through in-person meetings and events, aimed at familiarising organisations with the new features and their potential integration.
Avalara's new developments follow its recognition in the IDC MarketScape Report: Worldwide SaaS and Cloud-Enabled SaaS Sales and Use Tax Automation Software for Enterprise 2024 Vendor Assessment, for its compliance automation capabilities.
