End-to-end tax compliance module embedded into SAP S/4HANA for a U.S. retail and distribution enterprise, automating multi-state filings, real-time calculations, and audit-ready reporting.
About the client
A U.S.-based enterprise in the retail and distribution sector, operating across 15+ states with a large-scale SAP S/4HANA ERP infrastructure and complex multi-jurisdiction tax compliance requirements.
Introduction:
In 2024, Devox Software was brought in under NDA to untangle tax compliance for a fast-growing U.S. retail and distribution enterprise. Despite using SAP S/4HANA, the client struggled with fragmented tools, slow filings, and rising audit risks. We delivered a full-cycle tax engine — deeply embedded in SAP, integrated with Avalara, and built in just eight months. It now handles thousands of transactions daily, applies real-time rates across 15+ states, and automates filings with SOC 2-grade control. The result: faster closes, zero penalties, and a finance team freed from manual grind.
Project Team
Composition:
To deliver under tight deadlines, we assembled a cross-functional team with deep SAP and cloud integration expertise:
The team operated across three time zones, maintaining high delivery velocity through daily syncs and shared DevOps visibility.
Challenges:
Even with SAP in place, the path to unified tax automation wasn’t plug-and-play. The project introduced multiple layers of complexity — both technical and organizational:
Results:
BUSINESS OUTCOMES
60% faster month-end closes. Manual tax reconciliation and report generation that used to take over a week now takes just hours. The finance team closes the books days earlier, freeing time for analysis and strategic planning.
Zero compliance penalties in the first year. With real-time tax calculations, automated filings, and full audit trails, the client passed internal audits cleanly and avoided late fees or inaccuracies across more than 15 U.S. jurisdictions.
Scalable tax compliance across state lines. The system now supports thousands of daily transactions with automatic application of jurisdiction-specific rules — from ZIP+4 accuracy to marketplace facilitator logic — allowing the business to expand without reworking tax operations.
Shift from manual work to strategic oversight. By automating lookups, returns, and filings, the finance and tax teams now focus on review and exception handling, not data entry — reducing burnout during peak periods.
Built-in audit readiness. Every tax event — overrides, exemptions, filings — is timestamped, user-attributed, and stored securely. The platform provides clean, drillable reports for auditors without additional prep.
TECHNICAL OUTCOMES
Real-Time Tax Engine Integration. Each SAP transaction — from sales orders to purchase invoices — now triggers real-time calls to Avalara AvaTax, applying current federal, state, county, and city rates with ZIP+4 accuracy. No more manual rate management or outdated lookup tables.
SAP-Integrated Filing & Reconciliation Dashboard. A custom Fiori-based dashboard gives tax teams visibility into accrued taxes per jurisdiction. Reports are auto-generated in state-specific formats, available for internal review, export, and e-filing workflows.
Automated E-Filing with Full Audit Trail. For jurisdictions that support it, returns are filed automatically via API or secure SFTP. For others, the system generates validated XML/PDF outputs. Every return, adjustment, and override is logged with timestamp and user ID — simplifying audits and change tracking.
Enterprise-Grade Security and Compliance (SOC 2). All data at rest (PostgreSQL/AWS) and in transit (SAP ↔ Avalara/API calls) is encrypted. Role-based access in SAP strictly limits who can view or modify tax data. The integration layer adheres to least-privilege design, and all sensitive operations are logged.
Robust Middleware Orchestration Layer. A Node.js service hosted on AWS and SAP BTP orchestrates data between systems, enabling background tax summarization, formatting, and submission. This decoupling ensures high availability during peak filing loads and allows scaling without disrupting SAP core processes.
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