 |
|
|
|
||
|
    | RECAP,
Inc. > News
|
|
     
              |
|
|||
|
|
|
|
Originally published in KEEP UP TO DATE on ACCOUNTS PAYABLE Laying a solid tax foundation when
Setting up a new account in your master vendor file gives you a chance to lay the right tax foundation that will make your job easier down the road. But surprisingly, many A/P pros aren’t taking advantage of this opportunity, according to a recent survey by RECAP, Inc. Here’s what your peers are doing—and how you can act now to avoid future hassles. Laying the groundwork Shocking fact: only 53% of payables departments surveyed require a tax ID number (TIN) before they add a new vendor. That means there’s a lot of scrambling going on when year-end rolls around. It’s better to start off on the right foot, by making sure you have TINs immediately. Consider instituting a company-wide policy to not issue any checks until you have a TIN for every vendor. That saves the hassle of back-up withholding later on. Even more shocking: Only 31% of respondents always put the ID number in the system. And if it’s not there, you’d have to pour back over paper records to find the number at 1099 time. Best Bet: Require TINs from all new vendors. And leave a space in your AP system for it—even if it means using a blank field designated for a second phone number. Following up Surprisingly, almost half (47%) of the respondents don’t do any follow-up with new vendors. And those that do only send W-9s. You’ve got a terrific opportunity of your hands when you set up a new vendor: Take the time to acquaint them with your tax policies, including how you handle back-up withholding. A simple form letter can show how seriously you value tax compliance. Of course this may take a little extra effort on the front end, but just remember how many last minute headaches you’ll avoid at year-end. Info: RECAP, Inc., 888-697-6430. "Laying a solid tax foundation when setting up new vendor accounts" ©1998 Progessive Business Publications. For subscriptions ($299 for 23 issues) call 800-220-5000 For more information
about RECAP or its services,
|