Via the funding of Oxford University's Commission on Sustainability Data, Avalara is exploring how businesses can tap into their transaction data in ways that could optimize their operations.
The company’s solutions handle the essential functions of indirect tax compliance, including calculating, reporting, and remitting taxes to relevant jurisdictions. But its latest venture goes far beyond taxes.
Building on Avalara’s established expertise in tax compliance, this research aims to empower customers to build a database that not only provides greater control and insight into their business operations but also allows a company to prove the data is truthful to third parties, potentially lowering cost of capital, allowing supply chains to be insured, and optimizing how the company can engage in AI with thousands of other companies.
The Real Story Behind Every Business
When stripped down to the studs, a series of transactions defines a company’s purpose and impact. Every sale, purchase, and inventory move shows up somewhere in the company’s software.
All these digital breadcrumbs can tell a powerful story if pieced together correctly. Banks could lower risk with this proven transaction data. Regulators could wave audits. Supply chain insurers could be built on it. But how could they be sure they’re getting the whole picture?
In a typical business scenario, data converges from multiple sources: the online store, payment systems, tax software, and bank accounts. These streams of interconnected data naturally overlap and verify each other. If something doesn’t match up, it raises a red flag. This natural cross-checking is what Avalara and Oxford researchers call a “self-auditing dataset.”
This data is generic, meaning that similar transactions from different businesses can be understood and analyzed in a standardized way, fostering greater transparency and interoperability across any two parties.
The Oxford team is developing ways for businesses to:
- Keep their transaction data wherever they want, maintaining control and allowing them to meet legal requirements, such as consumer data protection laws.
- Verify that data came straight from the source, untouched by manual intervention.
- Prove nothing has been altered.
- Use algorithms to prove the totality of particular transactions represented in the data.
Those hoping to game the system face an uphill battle. To create false transactions, one would need to sync false data across multiple interconnected systems in real time. The cost and complexity make doing so impractical, especially with auditing algorithms working alongside existing fraud detection tools.
The Power of Provable Truth
When businesses can prove their data is both complete and accurate, new doors open:
- Banks can offer better loan terms because they can accurately assess risk.
- Insurance companies can confidently cover complex supply chain operations.
- Businesses can share reliable data for AI analysis and operational improvements.
- Countries focused on environmental protection can verify sustainability compliance before allowing market access.
While Avalara continues making its mark on the tax compliance world through cloud solutions that work seamlessly with systems like SAP ECC and S/4HANA — handling everything from tax calculations to exemption certificates — they’re also looking ahead.
Every business saving data via this method would strengthen a growing network of trusted transactions. Supply chains run smoother when everyone knows the numbers are accurate. Industries adapt faster when they share a foundation of vetted data.
By funding this research, Avalara is pioneering ways to transform raw transaction data into verified business intelligence that opens doors, empowering banks to make faster lending decisions, regulators to gain confidence in compliance, and trading partners to see proof of performance in real time.