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Any A/P pro worth his or her spreadsheets knows that a little pre-year-end prep can make the entire process easier. But is it worth it to ask every vendor for an updated W-9? Chances are, it’s not.
Some A/P departments ask for updated W-9s each year. That’s great if you have the time, but it does mean spending some time on tasks that don’t need to be done.
Bear in mind: W-9s are good indefinitely, so if there’s no reason to believe a vendor’s information is out of date, you don’t need a new W-9.
Best practice: Instead of hounding every vendor for a new W-9 (or even confirming the info) you may want to limit your efforts to companies who throw up a yellow flag that they may need a new form. Some of the signs:
- moving to a new location
- mergers or acquisitions (some merged companies take on the buying company’s TIN)
- a change in ownership (may indicate that a company is now a corporation).
The only time you have to get a new W-9 is if IRS sends a B-notice for a vendor.
What’s your take? Is it worth to get new W-9s (or their equivalent) from vendors each year? Or does it take more time than it saves? Let us know in the comments.