Combine 1099s to Facilitate AP Processing

  • by Curt Spath, SAP FI/FSCM Manager, Dickinson + Associates
  • March 27, 2013
Learn how to combine 1099s and change vendor master data to shorten the time needed for the processing of tax payments.

Do you have multiple vendors with the same taxpayer identification number (TIN)? Are you not including the full amount of payments made in a year on the 1099s you issue because payments to one account are below the IRS reporting threshold, while payments to another vendor account are above it? Are you sending multiple 1099s to the same vendor? 

These situations result in extra processing and mailing costs. They also create additional vendor queries that consume your staff’s time. These situations also can result in IRS inquiries or fines that might be assessed for using multiple 1099s. These issues are easily resolved with simple changes to master data and configuration.  

These changes yield the following benefits for organizations:

  • They can reduce your mailing, handling, and postage costs by having one 1099 per vendor instead of multiple. This consolidation provides you with flexibility when multiple vendor master data records exist and in handling SAP acquisition conversions in midyear.
  •  They can make your supplier happy when they want only one 1099.
  •  They can allow you to report fully for those balances that appear under the IRS dollar limit threshold by combining accounts — a step that can help you avoid fines, audits, and inquires that cost you time and money. You can also use this same procedure for 1042 and other tax reporting.

I explain how you can resolve these issues with three simple steps: 

  1. Configure settings
  2. Maintain vendor master data
  3. Run the year-end process for the 1099s

Curt Spath

Curt Spath is an SAP FI/FSCM manager at Dickinson + Associates. Curt leads the firm’s team focused on AR/AP optimization projects and SAP Financial Supply Chain Management (FSCM) projects. He has 35 years of business experience, including 18 years of SAP consulting.

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