Now is the Time to Get Your Ducks in a Row!
4th Quarter is beginning and it there is no better time to ensure that you will be prepared for end-of-year requirements. Simple ongoing maintenance throughout the year will make things easier in the long run.
No matter what accounting software you are using, it is best to run a Books Review on a regular basis to ensure that all transactions are categorized correctly and have payees listed; all accounts are reconciled; all reports are reviewed and that there are no loose ends.
Checking for duplicate vendors as well as donors/customers is also wise as there may be multiple individuals/companies that should be merged to accurately account for the funds paid or received. Although this process can be tedious, it is beneficial in the long run if even one duplicate is located.
Another sound practice is to review all service vendors, legal professionals and landlords to verify that completed W-9 information and emails are entered into your accounting software. If an outside vendor (individual, partnership or LLC) is paid for services in the amount of $600.00 or greater, a 1099 must be sent at the end of the tax year. It is best not to wait until the last minute to collect this information as it is sometimes very difficult to obtain after the fact.
A recommendation that I make to my Clients that they obtain completed W-9s and email addresses for all of their vendors PRIOR to payment. Once a vendor is paid, there is no incentive for them to complete the W-9 and return it with a valid email address. It often becomes very difficult to track them down in this situation. A Client may be fined for not following IRS regulations by sending out 1099s.