Avalara Alternative Approaches to Tax and E-Invoicing Compliance

Avalara is a well-established tax compliance platform that supports tax calculation, reporting, and e-invoicing as part of a broader compliance suite. It is built to serve specific operational and organizational needs.

In this blog, we take a closer look at how Avalara works, which types of businesses benefit most from it, and where its approach may not be the ideal fit. We also outline scenarios where an API-first e-invoicing infrastructure, such as DDD Invoices, can be a more suitable choice depending on product architecture and growth goals.

Two different compliance models

Let’s get the elephant in the room out of the way immediately.

When evaluating compliance platforms, it’s helpful to distinguish between tax-first platforms and invoicing-first infrastructure. Avalara is designed to centralize tax logic, reporting, and filings within a dedicated compliance platform. DDD Invoices focuses on embedding compliant e-invoicing directly into existing software products, allowing compliance to run quietly in the background.

This distinction leads to a clear outcome: bigger organizations running tax internally tend to benefit from Avalara, while software providers embedding invoicing into their products typically outgrow tax-first platforms and require a different architectural approach.

Avalara: Enterprise-Grade Tax Automation

Avalara is a US-based, cloud tax compliance platform designed to help businesses calculate, manage, and report taxes across multiple jurisdictions. Its approach is primarily tax-first, meaning tax logic, reporting, and filings are centralized within a single platform. It supports a wide range of digital tax compliance use cases, including sales tax, VAT, licensing, and tax returns, offering automation for organizations operating across different regions and regulatory environments.

Strengths of Avalara

• Broad coverage across sales tax, VAT, licensing, returns, and cross-border transactions
• Well suited for complex, multi-entity organizational structures
• Strong reporting, audit, and monitoring capabilities
• Centralized visibility into compliance activities across jurisdictions
• Cloud-based infrastructure designed to handle high volumes and multi-market operations
• Increasing emphasis on AI-driven tools to support compliance workflows

Target Users

Avalara is commonly used by companies that manage tax and compliance in-house, ranging from growing SMBs to large enterprises. It is particularly relevant for organizations with dedicated tax or finance teams that prefer a centralized platform to oversee compliance across industries such as retail, manufacturing, software, logistics, and the public sector.

Main Avalara’s Features

Avalara’s primary focus is on automating tax determination, reporting, and broader compliance workflows across regions. The platform is designed to reduce manual compliance effort through automation, with a growing emphasis on AI-driven capabilities to support and streamline tax operations.

Considerations When Evaluating Avalara

Avalara’s considerations are primarily related to use-case alignment rather than product quality. The platform is widely recognized for its comprehensive tax automation capabilities, while feedback around e-invoicing and developer experience tends to be more mixed.

Common considerations highlighted by customers include:

• Pricing structures that are typically aligned with enterprise-level deployments
• Complex onboarding processes for smaller teams or organizations that only require invoicing compliance
• Limited flexibility for product-led or API-first architectures, including fewer white-label options
• E-invoicing positioned as a complementary capability rather than a foundational system layer
• Broad feature sets that may exceed actual needs, contributing to higher total cost of ownership
• Strong depth in U.S. tax compliance, while EU-focused e-invoicing and mandate-driven workflows are less central to the platform

E-Invoicing Avalara Alternative

DDD Invoices approaches compliance from a fundamentally different angle. Instead of building a tax platform for end companies, DDD Invoices is an API-first, invisible e-invoicing infrastructure designed primarily for software providers - ERPs, SaaS platforms, marketplaces, billing systems, and invoicing tools.

How the models differ

• Avalara: A tax-first platform where companies run compliance inside Avalara
• DDD Invoices: An invoicing-first infrastructure where compliance runs inside your software

For a complete comparison read: ''Avalara vs DDD Invoices: End-User Tax Automation or Compliance API''.

Where DDD Invoices is strong

• Single standardized API for issuing, sending, receiving, and archiving compliant e-invoices
• White-label and multi-tenant by design - your UI, your workflows, your branding
• Same integration logic across countries, reducing engineering overhead
• Built to turn compliance into a product feature or revenue stream, not a cost center
• Designed for scale across many markets (width), not deep tax operations (depth)
  

DDD Invoices fills the gap for software-driven ecosystems that want compliance running quietly in the background, while Avalara shines for financial and tax departments seeking visibility and breadth across compliance areas. In practice, some organizations use both: Avalara for tax calculation and returns, and DDD Invoices as the embedded e-invoicing layer.

FAQs

Is Avalara an e-invoicing provider or a tax platform?
Avalara is primarily a tax and compliance platform. E-invoicing is one of many supported modules.

Does Avalara support APIs?
Yes. Avalara offers APIs and integrations, typically monitored and managed through its platform UI.

Who should use Avalara?
Companies handling tax management internally - from SMBs to large enterprises - across industries such as retail, manufacturing, logistics, and software.

Who should use DDD Invoices instead?
Software providers embedding invoicing into their own products. DDD is API-first, white-label ready, and built for compliance infrastructure.

Can Avalara and DDD Invoices be used together?
Yes. Some organizations use Avalara for tax automation while using DDD Invoices as the backend e-invoicing engine.

Do both support real-time reporting?
Yes. Both platforms support real-time reporting, implemented through different architectural models.

You can read more FAQ about DDD Invoices here.