This may sound strange, but I actually like the process of sending 1099’s to contractors each year.  Why?  It forces you to really review your vendors and who you do business with.  How much did you pay for an attorney’s services this past year?  Does a company have a new mailing address?  The list goes on.  While I find the process of auditing my vendors therapeutic, realizing your records for them are incomplete to generate your actual Form 1099’s can be a bit stressful.

I prefer to send a Form W-9 to EVERY vendor before I cut the first check.  The vendor has an incentive to then return the completed form quickly, since they would really like to get paid.  As soon as I receive the completed form, I update my QuickBooks vendor profile.  I keep the hard copy on file, or you can choose to scan them in.  These forms are for your records…no need to send them to anyone or the IRS.

At the end of the year, there is a mad dash of accountants and bookkeepers to get complete information for all their vendors.  There will always be a few holes to fill in, but if you make an internal guideline to send them out to every new vendor going forward you won’t have this on your already lengthly to-do list in Q1.