# Step 3: Company strategy selection

Source: https://developer.avalara.com/ai-onboarding/adk9249036306487/

# Step 3: Company strategy selection

Learn how ERP entities are represented as AvaTax companies and how the company structure is established for tax calculation and reporting.

This step determines how ERP entities are represented as AvaTax companies and establishes the company structure used for tax calculation and reporting.

## When this step occurs

This step occurs after the preflight check is complete and before any AvaTax companies are created as part of onboarding.

## What the AI agent does

During this step, the AI agent analyzes detected ERP entities and guides the user through company strategy decisions.

The following workflow illustrates how the AI agent evaluates ERP entities and presents company and nexus configuration options.

![Company strategy workflow](https://knowledge-be.avalara.com/bundle/fuh1905384702210_fuh1905384702210/page/hxn1680689175888.image?_LANG=enus)

Based on this analysis, the AI agent:

-   Evaluates whether a single-company or multicompany strategy is appropriate.

-   Explains the implications of each approach to the user.

The AI agent presents the following strategy options:

-   **Single company strategy:**

    All selected ERP entities are represented under 1 AvaTax company.

    This approach typically supports simpler setup, consolidated reporting, and centralized tax operations.

-   **Multiple company strategy:**

    ERP entities are represented as separate AvaTax companies.

    This approach supports entity-level reporting, distinct tax profiles, and decentralized tax operations.

The AI agent highlights trade-offs between the options to help the user make an informed decision.

## Outcome of this step

After the user approves the selected company strategy, the system immediately creates AvaTax companies using the AvaTax Companies API (`[POST /api/v2/companies](https://developer.avalara.com/api-reference/avatax/rest/v2/methods/Companies/CertifyIntegration/)`).