Starting with Tax Year ’11, all “payment card transactions” will have to be reported on information returns, just like all your other vendor payments — but in this case, you’ll be relying on the card issuer or other third-party processor to hand over the vendor’s name, address, Taxpayer Identification Number (TIN) and the gross amount paid.

All of this is to make sure that those payments (a) get reported and (b) get taxed properly. The rule also drives home the point that these transactions are subject to backup withholding if you don’t have a TIN for the vendor –  just as any other payment would be. The problem there is, you can’t backup withhold on a payment that’s already been made.

For that reason, the rule also allows card issuers and other payment processors to immediately start submitting the names and TINs of vendors in their networks to IRS’ TIN Matching Program. The hope is that by getting a running start, the payment processors can confirm accurate TINs for every vendor and avoid having to do any backup withholding.

A new form 1099 needed?

Two things are still up in the air:

1. How exactly these transactions will be reported, and
2. How you and your card processor will need to interact to ensure all the correct info is recorded and filed.

It may require a new form altogether, or IRS may opt to simply add a few lines or boxes to the existing 1099-MISC. It may also require you and the bank or other third party that facilitates these payments for you to get together to revamp processes, confirm transaction records, etc.

The good news is: You have two years to prepare — and IRS still has time to work out the kinks. We’ll keep you posted on any developments.

You can read all the details here.

You can still submit the information on a paper Form SSA-131 or cartridge models 3490 and 3480. But diskettes and all other cartridges are no longer accepted.

SWP refers to wages paid to employees after they’ve retired or back pay awarded by a court or government agency.

Just under 2 million corporate and partnership income tax returns were filed electronically — more than 50% more than the prior year.

Large partnerships using e-filing increased a whopping 156% over ’07.

It’s easy to see why more companies are jumping on the bandwagon: Electronically filing your corporate tax returns and related information returns can reduce errors. And for some forms, like the 1099-MISC, extended deadlines make it more convenient to use the e-file option.

Which filing methods do you use — and why? Share your perspective in the comments.

Total spending on purchasing cards is expected to grow 12% per year between now and 2012, according to the latest “Purchasing Card Benchmark Survey” by RPMG Research. In 2007, $137 billion in transactions were put on p-cards.

The growth is coming from two main drivers:

1. the amount spent per transaction is up 6%, and
2. cards are assigned to more people/departments within companies.

In fact, 80% of companies using p-cards in ’05 reported more p-card spending in ’07. And it’s not just large companies leading the way. More mid-sized companies reported increased spending than any other size of company.

In particular, companies were increasingly likely to use p-cards for purchases of:

• computers and peripheral equipment
• telecommunications services and products
• printing and copying services
• advertising and media, and
• transportation or delivery services.

Why the increase in usage?

It’s all about the bottom line. The average cost to process and pay a transaction on a purchasing card is about $70 less than using the old-school paper P.O./check method.

If your company (or a key vendor) has been reluctant to try p-cards, it’s worth revisiting the issue. With significant savings possible, setting up a card program could quickly make up for any upfront costs.

If you’re worried less about cost and more about headaches and aggravation while you’re switching over, bear in mind that choosing a solid card vendor can eliminate most hassle. And starting small — say, by only using cards in one department or with one vendor — can help you work out the kinks early and minimize disruption.

The answer: Airline miles — and hotel points, cash back offers, or any number of other perks offered by the employees’ personal credit card issuers.

With the average business trip costing somewhere in the $1,500 range, even a modest rebate can be an attractive “bonus” to employees who are feeling the pinch of this economy. In fact, 74% of employees admitted they don’t always use their company’s preferred method of payment because of the perks they get from their personal cards.

Another 21% said they either never received a card, or the card isn’t accepted in some of the places they travel. That’s according to a recent survey by T&E magazine.

To get road warriors to use company-issued cards, you have two options: The carrot or the stick:

1. If possible, incentivize travelers to use the cards. For example, you might get upper management to agree to kick a percentage of the cards’ rebates back to employees as profit sharing, or as a bump in their departmental budgets. If that’s not an option, an internal competition to see which department can set the highest bar for card compliance might help.
2. If incentives don’t work, penalties might. Even a mild step, like flagging a department for non-compliance can send the message that the practice have to end. Key: Upper management has to demonstrate they’re behind your efforts, so make sure they’re on board first.

What have you tried to get more travelers to use company-issued credit and travel cards? Let us know in the comments what has — or hasn’t — worked for you.

Although e-invoices are still far more common among larger companies, small and mid-sized companies are quickly piling onto the bandwagon.

E-invoices are mostly a benefit: They reduce your paper load, save time and can reduce the number of errors you find, since they usually eliminate several manual steps.

That doesn’t mean adapting to e-invoices is always a snap. Any change in procedures can cause headaches at first.

If you’re interested in dipping a toe in the waters — or you’re forced to by a key vendor — bear in mind these two key points:

1. Over-communicate with everyone involved. Without a good sense of what each party needs (purchasers, A/P, vendors, etc.) you can’t create an efficient and effective new procedure.
2. Test, test and test again before your system goes live. Not only does that give you a chance to work out any bugs, it builds everyone’s confidence in the new system.

Inefficient procedures, lack of company-wide usage, etc., can curb the value of any card program you put in place.

Fortunately, VISA has released an updated and expanded best practices study to help you make the most of whatever system you’re using. And if your company is just getting ready to dip a toe in the waters, it’s a great resource for figuring out what features you need — and what you can safely steer clear of.

Key points

The study looked at the entire procure-to-pay (P2P) process and found that the most important best practices were:

• Automating from start to finish
• Integrating the card program into company-wide initiatives
• Getting active support from upper management
• Developing integrated controls, and
• Using the full extent of reporting and spend analysis tools.

To get more ideas for how to make your own company’s card program more valuable and efficient, check out the full report.

But they’re aren’t doing it just to protect their own pockets. Most banks cited the need to improve customer confidence as a key reason for the increased vigilance.

That bodes well for Accounting pros: Not only should you have safer accounts and more secure transactions, but you’ll likely see better service in terms of increased information access, speedier responses to queries, etc.

The reason: Many companies haven’t kept workers’ home offices up to snuff when it comes to protecting company data and files — especially if employees work from home on an irregular basis.

And even if your IT department put tough controls in place, employees frequently disable them for convenience, or even by accident. The most common problem is with workers using unsecured wireless Internet connections.

If those at-home workers happen to have any documents with sensitive info on their computers (think worker SSNs or a vendor’s e-payment account number) the headaches could multiply for Accounting. Anyone else on the wireless network can siphon off that info without the staffer being any wiser.

It’s worth reminding any managers, invoice approvers and Accounting staffers who may sometimes work from home to keep their security measures strong. You might want to consider asking IT to revise its policies and procedures so employees who do have even indirect access to Accounting info have tougher tech controls in place.

That’s more than 2 billion e-transactions per year.

The rapid growth stems from a big benefit: The security and ease of e-payments can save time and money for both you and your vendors.

If you’ve been delaying use of ACH, it might be time to re-examine. Vendors used to balk at setting them up, but now more vendors are happy to accept ACH payments. Some are even encouraging it with discounts or other perks.