Avalara Customer Success: Cady Bag

About Cady Bag Company

Cady Bag Company is an American manufacturer based in South Georgia. With over 65 years in the industry, Cady Bag Company has evolved from producing mesh bags to polypropylene fabrics, roofing fabrics, and other packaging materials. The four main business units they serve are consumer packaging, cotton bale packaging, leno packaging, and coated fabrics. The company is driven by innovation, committed to customer satisfaction, and maintains its Southern Georgia values.

The Challenge

Although physically present in just one state, Cady Bag Company sells to customers nationwide. In 2018, the South Dakota v. Wayfair court case caused Cady Bag Company to invest in learning about economic nexus. 

Nexus is one of the most complex and important considerations for multistate and multinational businesses operating in the United States. Obed Carachure, Financial Controller at Cady Bag Company, explains that it took the company one year of studying before determining that they had triggered a nexus in states besides their physical Georgia location. “We learned even though we don’t have a physical presence in California, we are selling so much to that state that we may trigger economic nexus,” explains Obed.

While the company was content with managing Georgia state taxes in-house, additional state taxes, each with its own tax rate and jurisdiction, pushed the accounting team to outsource. “It will be too complex,” responds Obed. “Too many resources will be needed to be allocated to that department just to keep up with sales tax combined.”

“We realized it would take a lot of human power, a lot of personnel, a lot of resources, a lot of time to update those rates in our ERP system.” - Obed Carachure, Financial Controller, Cady Bag Company.

The Solution 

 Cady Bag Company needed to understand how many states it reached the economic threshold in. To do so, it began with a nexus study within the company. Today, Cady Bag Company is registered in 14 states. The company turned to the taxation management software Avalara to maintain compliance.

“There’s different rules and laws for each state,” Obed explains. “So, we look at that diligently, and Avalara is calculating sales tax for us and filing the returns. It helps free up resources to make those decisions that we should register in a particular state. Avalara, they act as a lifeline of sorts for us.”

Within Avalara, each sale transaction is accounted for, so a company knows when it has hit the sales threshold. The system will then alert operators with warning lights to tell them that they may be approaching nexus and might want to consider registration. Even when a state changes the threshold, Avalara is up to date and helps companies remain compliant.

Obed tells us the implementation was very straightforward. Before pushing the Avalara integration into their ECI ERP, Cady Bag Company ran the software on the Avalara sandbox to ensure proper connectivity. When everything looked fine, they pushed it live. “The onboarding was pretty easygoing for us. It probably took us less than three weeks to have the whole thing. It was a pretty straightforward process for us,” retells Obed. 

For more information on nexus and state taxes, visit their website: https://www.avalara.com/us/en/index.html.