Leveraging Artificial Intelligence, Avalara aims to make a mark in the Indian market by addressing dynamic taxation and accounting needs of businesses
By Srinath Srinivasan
Goods and Services Tax (GST) has been driving the development of tech-based taxation products and solutions. It has given a host of operations to be automated, from GST registration to filing returns and everything in between. In the world of cloud native tax products, Avalara has been trying to solve for the automation of these operations and workflows in India. “GST regime can help save a lot of manual effort. Not too many people have understood this,” says Manjula Muthukrishnan, MD —India operations, Avalara, a US-based software company.
“Look at the way the entire GST regime has worked—mandating the returns online, bringing up e-bills and then the multiple target dates for compliances—it has actually forced a number of organisations to move into that direction,” she says.
The pandemic has also necessitated a lot of businesses to move online which has further increased the demand for tools and solutions that can ease their GST needs. According to Muthukrishnan, the business community, especially SMEs, are just getting started with the process of automating their taxation and bookkeeping workflows and this presents a huge opportunity for various solution providers like Avalara.
“India presents large opportunities on the direct and indirect taxation front due to its sheer size,” says Muthukrishnan. For tech companies working to bring out optimal solutions to the numerous touch points in the processes, it means deep engineering and strong investments in R&D. India has been one such engineering hub for Avalara.
“Engineering is our primary bread and butter. There has been significant contributions from our Pune and Chennai teams,” says Muthukrishnan.
In addition, Avalara looks for talent which can cross contribute to tech accounting and taxation. The company has in-house chartered accountants and tax lawyers who directly contribute to the products. To make product engineering even more effective, Muthukrishnan reveals that the company is planning to engage with the developer community in a much deeper way than how it is currently involved. “We are actually coming out with a significant programme in terms of improving our developer community integration. Otherwise, typically, we’ve been very open in terms of hosting a lot of technology platforms, where AI and ML are discussed and experimented in detail to streamline and automate processes,” explains Muthukrishnan.
However, things are not easy in a traditional and crowded market. According to Muthukrishnan, regulations and deadlines were the primary reason for a lot of businesses to move online. This behavioural change is hard to bring about. There is a growing demand for product companies to design very simple products that cover the length and breadth of the GST regime, all the while keeping pricing in mind.
Also, there are users who are used to a certain product and tend to stick with it, making it a challenging task to capture and retain the market.
“Customers also ask us about security and privacy. This is an area of constant supervision and we need to take this confidence to the market, to the customers,” says Muthukrishnan. According to her, the company collects only transaction data of enterprises to optimise the products, while retaining anonymity of the users.