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Establish a connection between AvaTax and Microsoft Dynamics 365 for Finance and Operations

After you install the integration software, connect Microsoft Dynamics 365 for Finance and Operations to AvaTax.  

Before you begin 

  • If you haven't created a company profile in AvaTax, create one now
  • Have your account number and license key with you.

    Avalara sends the account number and license key to the person who logs in to AvaTax and accepts the terms and conditions. If you can't find it, check to see if it was sent to someone else at your company.

    If you can't find your license key, you can generate a new one.

Steps

  1. In Microsoft Dynamics 365 for Finance and Operations, go to Avalara AvaTax > Setup > AvaTax Setup Assistant.
    The Avalara Account Credentials page opens.
  2. Enter your account credentials to connect Microsoft Dynamics 365 for Finance and Operations to AvaTax:
    1. Enter your AvaTax account number and license key.
    2. For the web service URL, select whether you want to connect to a production or a sandbox account.
    3. Select Verify Credentials.
    4. For the company code, select the company you want to connect to and then select Next. 
      The Map Sales Tax Group page opens.
  3. Select AVATAX for the sales tax group. 
  4. Select Ledger Posting Groups, choose the sales tax accounts to associate with your AVATAX ledger posting group, and then select Save and close the Ledger Posting Groups page.

    If you see "The posting type must be Sales tax" error:
    1. Verify your credentials again to make the Next button active and then select Next.
    2. Save the setting and go to Avalara AvaTax > Setup > AvaTax Setup Assistant.
    3. Navigate to the Main Accounts page and ensure the posting type of the account you're selecting is correct.
  5. Update the sales tax group to use AvaTax to calculate tax for customers or vendors.
    1. Select Tax Group Code Mass Update.
      The Tax Group pane opens.
    2. Select whether you want to map a customer or a vendor. 
    3. Select AVATAX for the sales tax group.
    4. Select the Range field and then choose Select.
      The Inquiry page opens. 
    5. On the Range tab, select the down arrow under Criteria, select the first customer or vendor in the range, and then type 2 periods (..).
    6. Select the down arrow again, select the last customer or vendor in the range, and then select OK.
    7. Close the Tax Group pane.
    8. Repeat these steps to add other customers or vendors.
  6. On the Enable Address Validation page, select the countries for which you want address validation enabled (available for the U.S. and Canada) and then select Next.
  7. Select Test Calculating Tax.
    If you receive an address error message, update the business address for your legal entity.
  8. Select Finish and then refresh any workstation that was open while running the Setup Assistant to ensure it's updated with the most current AvaTax configuration settings.

Microsoft Dynamics 365 for Finance and Operations is now connected to AvaTax and ready to send transactions for tax calculation. To further customize the way Microsoft Dynamics 365 for Finance and Operations interacts with AvaTax, see AvaTax settings for Microsoft Dynamics 365 for Finance and Operations