The vendor life cycle is one of the most important components of compliance for companies. Oftentimes vendor onboarding is examined with only flowcharts and bullet points, leaving important information out regarding the process and value of compliance and data security.
When businesses examine the importance of vendors, it is necessary to focus beyond the initial onboarding and their separation to better understand the steps that occur throughout the entire duration of the life cycle. This article will explore the process a company must take to engage with the entire vendor life cycle: onboarding, verification, payments and 1099 filings.
To begin the life cycle journey, businesses need to organize and collect vendor data by requesting W-9 forms. Many companies automate this process, so the entry is as simple as sending the digital W-9 request by e-mail. After you’ve received all documentation, you will set each vendor up with their own profile in your preferred accounting software tool. After the data is entered, systems can log the data along with the signed W-9 PDG and save it for your records.
Once the W-9 is collected, the information can be used to validate the Taxpayer Identification Numbers (TINs) against the IRS records which can prevent your business from being assessed B-notices and penalties for reporting incorrect TINs. This is where you will want to verify that the legal name and the TIN/Employers Identification Number (EIN) or Social Security Number (SSN) combination provided by the payee match with the IRS database with Real-Time TIN Matching. Not adhering to these requirements could result in penalties and additional filing fees for corrections.
After verifying your vendors, onboarding them will be one of the easiest steps in the vendor life cycle. This is where you’ll set each vendor up with their own profile in your accounting software tool. During the onboarding process, you can conduct a test of the accounting tools to verify that accounts and invoicing are mapped properly.
Proper invoicing requires maintaining records of vendor payments throughout the year. This means not only making certain that individuals are paid on-time and paid correctly, but also determining what account should be properly credited, debited and assuring reports reflect that. Use your accounting suites invoicing tools as well as confirming payments are directed to the right accounts and account types with vendor mapping to chart of accounts.
Every year, the IRS requires businesses to accurately report information about payments made to individuals. Entities will want to verify that payments have been placed in the right categories for your recipients and report the information on the accurate form based on filing requirements and what category those payments belong to. Lack of accurate filing can lead to penalties.
When it comes to your onboarding, offboarding, and everything in between, Baker Tilly Digital’s integration harnesses the power of Tax1099 and Sage Intacct to assist in compliance and regulatory reporting. With these Baker Tilly Digital integration tools, your processes for W-9 collection and vendor onboarding can be automated with a simple email to your prospective vendors. For that extra step to validate vendors, you’ll want to utilize the TIN Check verification with Tax1099. Baker Tilly Digital’s integration streamlines all these features and helps accounting departments enhance their processes with Tax1099’s verification checks and informational tax compliance software.
Maintaining that data doesn’t have to be a challenge or something daunting. With the help of Baker Tilly Digital, you can save time on maintaining accurate records by automating your vendor 1099 review and cleanup process.
Reporting accurate information can be easy if you are managing vendor 1099s through Sage Intacct. What you’ll do at the end of the year is use the importing tools in the integration to carry tax information directly to Tax1099 from Sage.
During the filing season, you can issue those informational tax forms by email or USPS mail with Tax1099. You can file 1099s for the current filing season and two years prior through Tax1099. 1099 records are kept by Tax1099 for a total of 4 years in case you need your records for an IRS audit.
It’s time for your company to begin preparing their organization for full data compliance. Baker Tilly Digital harnesses the power of Sage Intacct with Tax1099 to provide thorough accounting, tax compliance and regulatory reporting to hundreds of thousands of accounting firms. To learn more about what we do, contact us.
Tax1099.com, powered by Zenwork, processes over 12 million of these forms a year, for companies in many industries. From some of the largest accounting firms and payment processors to AP departments of all sizes, these companies find help meeting the fast approaching deadline with compliance verifications all along the way, reducing unnecessary penalties. For over a decade, they’ve been the perfect resource for tax professionals and AP departments with over 40 different forms available that are filed to the IRS and states, including recipient distribution and other capabilities such as W-9 collection. For more information, visit www.zenwork.com.