Avalara Brings Agentic AI to Global E-Invoicing

Hi, everyone. Welcome back here to our coverage of Avalara CRUSH North America. We're in Fort Lauderdale.

My next guest is Alex Booth. Booth. Close.

Close. Okay. I tried it five times.

We probably did it live here. But Alex, first of all, welcome to Techstrong TV. Thank you so much.

Thanks for having me. My pleasure. I wanted you, if you don't mind, to share with our audience a little bit more about you.

You live over in the UK, but tell people your journey, your story. Yeah, absolutely. So I actually started in the world of tax, indirect tax, VAT, straight out of university.

Really? After a bit of traveling around Australia, I joined a Big Four firm, Deloitte. Sure.

Spent four years there, starting to learn about global trade, indirect tax, mainly- Four years in Deloitte is enough to learn ... Exactly. The consultant lifestyle.

Uh-huh. And then, big career move. I moved to Grant Thornton.

Uh-huh. Another Avalara competitor. Yep.

Another accounting firm. Competitor. And then within nine months, they actually gave me an opportunity to move to the US.

So, I lived in Chicago for a couple of years. Wow. And that's when my role, my career trajectory changed.

I started focusing more on global indirect tax. Mm-hmm. And more importantly, technology.

Right. So they started to advise multinationals on their processes, their technology, their data. I started implementing tax technology tools.

Came back to the UK, and then after 17 years in the consulting world, joined Avalara, which was a amazing move. So what made you make that hop? Right?

Because that's a different thing, right? It's one thing to do consulting. It's another thing to be a product company or a solutions company.

Absolutely. I think the expectation is you stay, you make partner at a firm, and it's a job for life. Yeah.

So I knew Avalara very well. They were actually a partner of Grant Thornton, so I knew a lot of the team, I knew their products. And then I had a phone call about a role.

" Within a couple of weeks, I think I'd spoken to about 10 people, including the CEO and founder then, Scott McFarlane, and I was sold. I was sold- Right ... about this great opportunity, and actually from that interview, how are we going to dominate the market?

How are we going to win? The answer was e-invoicing. Right.

There's this huge transformation happening across the world, and Avalara very much saw the opportunity. So we were talking off camera. We've mentioned e-invoicing a half a dozen or more times in the last two days during our interviews.

And I've tried to convey to the audience a little bit about it's not about just doing an invoice electronically, right? This isn't QuickBooks printing out your invoice or emailing an invoice to a customer. There's a lot.

Again, it's like the tip of the iceberg. You don't see what's underneath the water. When we say e-invoicing, Alex, how do you explain it to people who aren't accounting folks?

Maybe they're tech people. What do we mean by e-invoicing? Yeah.

It's a good question. I get a lot. We're talking about a digital document that is machine-readable.

It's data in a structured format. So not paper, not a standard PDF, not a document created in Word or Excel. It's actually typically XML.

Right. Something in universal business language, CII, the Cross-Industry Invoice. It's- Mm-hmm ...

structured data, common format, designed to be exchanged system to system, machine to machine, and processed automatically. Absolutely. And what are the kinds of things that e-invoicing records or reports on?

Yeah. So the invoice serves so many purposes anyway. It's how a business gets paid.

It's the kind of lifeblood of the company. So a lot of commercial details that you typically expect. But the real trend now is that invoice is being shared with the tax authority.

So that tax, that transactional information, is being shared at that transactional level. So the tax authority is seeing that information in real time. Historically, the only data they had was a VAT return.

A tax return submitted periodically, maybe every month, maybe once a quarter. But very summarized, very high level. Put simply, too little too late.

So, to combat fraud, to identify errors, inaccuracies, governments want to see the real detail- Sure at that moment the invoice is issued. Absolutely. And there's a lot of reasons for that, right?

Obviously, to combat fraud, better reporting. We live in a geopolitical world where there's sanctions, there's tariffs, there's VAT, right, on so many different things. And those VAT rules, as a US citizen, we don't really understand that, quite frankly, right?

Yeah. To me, it's just, I don't know, it's some tax they put on for something, and sometimes I get it back at the airport and sometimes I don't, right? As a company owner, and I know when I've done business over in Europe, and I buy services or something, I have to figure the VAT in, or am I VAT exempt somehow?

But it's all sort of Greek to me, if you know what I'm saying. And I imagine the charter for Avalara in this business is to translate that Greek into something that I can understand, right? Because it's more than just that XML invoice even.

It's helping me understand what are the costs to my company, and it's complex. That's one instance of it, but there's more than that. Oh, absolutely.

And, as you say, VAT, the VAT tax may seem quite alien to the US. The US is one of the only countries, one of the only major economies without a VAT or a GST. There's about 176 countries now globally- Jesus ...

with that in place. And under a VAT system, businesses can generally recover the VAT they incur on their costs. It's called an input tax credit.

Right. So that opens up avenues for fraud. So that is really- Sure it is ...

one of those drivers why countries are implementing it. But you're completely right. The insights that a tax authority, a government can get from e-invoice data, so can a business.

Mm-hmm. So, part of Avalara's solution or approach is taking that complexity, all of that structured data, visualizing that so people can see that data in a kind of visual format like they're used to day to day. Yeah.

Like the old world with PDFs and paper. But also with that data, you can run great analytics. You can get really insightful- Yeah ...

data from that. Absolutely. I want to emphasize that what you mentioned there, but it's worldwide.

We tend to think of that and we think of Europe, but when we talk about e-invoicing and stuff, companies like Brazil. Right? Brazil's a leader in this because, as often happens with this stuff, it gets rolled out in different changes and different milestones.

You could implement a VAT system. You could implement a tax system. But then implementing mandatory invoicing is yet- Mm a bridge further up the road.

And enforcing the implementation of that invoicing is yet another bridge, right? This is something as, again, as a US citizen, we see with the EU, they'll have a habit of saying, "Well, we're going to delay the enforcement here. Give this a chance to work- Mm ...

" We've seen it with cybersecurity, we've seen it with a number of things. But this is something Avalara has to... This is your tool of the trade.

You have to take this into consideration. This person's in Brazil, this person's in Argentina, this person's in Japan, this person's in Italy. And this all has to be sort of normalized and localized.

" Yeah. Absolutely. And e-invoicing has spread to every corner of the globe.

You mentioned Brazil, probably the most complex- Yeah ... tax system in the world at a federal level, state level, municipality level, and different taxes, different rates. So it's a country that Avalara entered and has been solving that complexity for years.

E-invoicing, Brazil was actually the trailblazer. Really? They've had e-invoicing for around 20 years.

Wow. Every time goods move between two states, there's electronic documents that are submissive to the tax authority. Everything is digitalized.

Mm. They're now embarking on a major tax reform over the next seven years, so big changes. But something that we look to take that complexity, and through our technology, provide something that's simpler to use, to understand, to deploy.

Excellent. Alex, if you don't mind, I want to pivot a little bit. We're here at Crush.

The big story at Crush has been agentic AI. They announced Aviator, which is the hub, if you will, the garage. But anytime you have complex kind of transactions such as this, AI does promise to not take the complexity out, because it's complex by its nature, but AI has a better ability to wrap its arms around it- Yep ...

to make it digestible rather than a Gordian knot that we just can't unravel. How's that affecting as you plan- Mm ... next year's business and beyond?

Absolutely. Firstly, really excited about Aviator, seeing it being launched here. But absolutely, we're looking to add agentic processes within our e-invoicing solution.

Mm-hmm. We can use AI to really digest really complex information that tax authorities provide. Yeah.

So within e-invoicing, we're always running schematrons, validations. Some of the error messages we get back from tax authorities are really complex- Yeah ... often in their local language, often really designed for systems to interpret.

So- Yeah ... we're using AI to take that and transform it into something that is easier to understand. Sure.

We want to create agentic workflows to really help people do the jobs that they typically do by just interfacing with our kind of monitor. Sure. So it has so many opportunities.

I think the main thing is the business still remains in control. They own their process. They need to own their compliance.

AI can provide a really useful way to kind of cut through the complexity, save time, save effort- But we always want to make sure that the customer remains in control. Absolutely. I've had the chance to talk to a few customers here the last two days.

What have you heard from customers around this? Are they, "Thank God you're doing this, can't wait to get my hands on it," or, look, there's a lot of people who are a little afraid of AI. They're hearing all of these doomsday stories and everything else.

What are you hearing from customers? So I've seen a lot of excitement. I've seen feedback, people generally excited with what they've seen.

I think AI can be a buzzword. Everyone wants to say they're using AI. I think the great thing we've done is we've actually shown the proof.

We've developed it. It's live, it's ready for customers to use. They can see the efficiencies that AI through Aviator brings.

But at the same time, as I said before, they remain in control. So that kind of fear kind of allays. Yeah.

They see where this can be used. Mm-hmm. People compare it to what they do today.

Yeah. It's a bit like e-invoicing, manually reviewing paperwork, manually inputting that into a system. Just- The moment you automate it, you get that business efficiency, you get that process efficiency.

Force multiply. Exactly. Absolutely.

And it's interesting. I think you hit the nail on the head. There's this almost schizophrenia about over here, "Oh, I hope it doesn't mean the extinction of humanity," but over here, "Look, this is really making my life easier.

And I want my life to be easier. " And there's that tension, and this might be science fiction, who knows? But this is real right now, and it's helping me, and I want to do that.

And I think that's the important thing people need to take away from the AI stuff. com. Yes.

And then just look up e-invoicing? Yeah, absolutely. We have a product page for our e-invoicing and live reporting solution.

We also have lots of blogs, country guides. Sure. com.

Feel free to follow me on LinkedIn. I always share kind of insights there. Good.

Alex, thank you so much. Thank you so much. Safe trip back home.

Thank you- Thank you ... for coming here to our home in South Florida for CRUSH this year. Absolutely.

blissful. I hope you didn't spend too much time at the hotel, and you had a chance to see the area a bit. It's a beautiful area.

But just going to wrap up this interview here. We've got more coming from CRUSH. You're watching Techstrong TV.

Thank you.