Is it time to ask for updated W-9s?
December 10, 2008 by Carol KatarskyPosted in: 1099s, Best practices, Communication, Hiring & training staff, In this week's e-newsletter, Internal controls, IRS regs, Latest news & views, Tax compliance
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Bear in mind: W-9s are good indefinitely, so if there’s no reason to believe a vendor’s information is out of date, you don’t need a new W-9.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.
Tags: 1099s, A/P, Best practices, Internal controls, IRS, Year-end
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December 11th, 2008 at 9:34 am
As a standard practice, I routinely request W-9′s from any new vendor prior to issuing a check to them, or if I know that there are changes within the vendor organization. I have never experienced someone unwilling (or too busy) to complete and return the W-9; vendors are very prompt to provide that data if payment of an invoice is pending receipt of the form.
December 11th, 2008 at 9:35 am
Requesting the W-9, as warranted throughout the year, eliminates the need to address this at year end.
December 11th, 2008 at 11:39 am
I agree that it is not necessary to request a new form each year. However, new vendors are asked to submit one for my file and when received, I update the accounting program, which will efficiently run the 1099′s at the end of the year. Too easy…
December 11th, 2008 at 12:40 pm
I agree also. As an A/P Specialist for 22 companies, it is not practical to request new W-9′s every year. We also hold payment until the W-9 is received for new vendors. We routinely run audit reports to follow-up throughout the year to verify that our 1099 vendors are up-to-date. It really saves when running the final reports this time of year. We also have a master Excel spreadsheet with all of our 1099 vendors’ information for cross-reference. It’s a very quick way to verify if a vendor works at more than one of our company’s.