This blog was last updated on June 13, 2023
Outsourcing your 1099 reporting can be a big change for your business and there are many aspects to consider before choosing a partner to aid in the process.
Staying compliant is the only way to avoid penalties from the IRS and state governments. Before you choose a partner in your reporting process, be sure to ask the following questions for a complete partnership in tax information reporting.
Can the products easily adapt to organizational changes?
An important consideration when looking for a software provider is looking internally first. If you are a company planning for expansion, whether that be through acquisitions, mergers, organic growth, launching new products or increasing your geographic footprint, find a provider that allows you to scale without your own organizational changes becoming a regulatory nightmare. The right provider understands the implications company growth can have on your reporting process and can offer agile, robust solutions that accommodate all changes.
How does the vendor keep track of regulatory changes?
A full reporting solution should be ready for any regulatory changes, even if they happen well into the January reporting season. Currently, there is no deadline for when the IRS or states need to make changes for the reporting year. This is especially true when it comes to state reporting requirements where changes can happen very late in the season.
It is important your provider can implement those changes quickly to ensure accurate filings. Other questions you may want to ask regarding regulatory changes include:
- What is the size of your regulatory team?
- Can you implement changes quickly, even if they happen during filing season?
- How late into the filing season are you able to make regulatory updates in the product?
Are the products robust enough to handle all of our reporting needs?
A trusted reporting partner should be able to handle all of your needs, including form volumes, form types, printing/mailing, federal and state filings, desired customizations, audit trails, outsourcing, and anything else that could help streamline and boost accuracy in tax information. Additionally, ask the following questions to get detailed information about product offerings:
- How can your solution limit IT involvement in the reporting process? Limit needing to transform your data to a standardized import file format by selecting a solution that is file format agnostic and can transform your data, so neither you nor your IT team must spend hours transforming the data.
- How can your company guarantee you meet all our delivery needs? On-time delivery should be at the core of a tax reporting solution. A favorable solution can map out when each piece of the reporting process needs to be done, so there is no second guessing if you will file on time.
I’m moving from an in-house manual process. How easy is implementation with your product?
Implementation is an early step in a new solution’s onboarding process. The following questions can give you a better understand of what implementation looks like, ensure it works with your team’s schedule and covers what you need to know on the new process.
How long does implementation take and what does the work look like from our end?
Do you charge implementation fees?
What does your onboarding process look like?
Will I have a named representative to contact with questions during and after the onboarding process?
What does customer satisfaction look like to your company?
An all-inclusive reporting solution should have a team of experts behind it to ensure that the products can fit each business’ reporting needs and ensure that each customer is satisfied with the services provided. To ensure you are working with a reputable team, ask the following questions:
- Does your company offer references with positive experiences?
- Is there a process in place to ensure my questions are answered in a timely manner, even during reporting season?
- Does your solution offer managed services or outsourcing if we are looking for a more hands-off reporting process?
Take Action
Still have questions about upgrading your 1099 reporting process? Reach out to our team to learn more.
