We love to worry for our clients.

Right now, for example, we’re worried – five months ahead of time – that our clients won’t have up-to-date 1099 information in their QuickBooks files. We know that when January 31st rolls around many businesses will scramble to pull together that information, diverting precious time from more strategic business concerns. Instead, we prefer to see clients calmly file their 1099s, close out their income tax returns, and focus on meeting their 2007 budgets.

If you haven’t kept up with 1099 data thus far in 2006…don’t worry. You still have time to catch up, and we explain how below. The bigger issue is to know that effective financial management depends on planning ahead, in lots of little ways. It’s often the difference between failure and success, between running the business and having it run you.

How to get 1099-ready in QuickBooks…

1. Pull a vendor phone list and customize it to show 1099-related information:
   • Vendor name
   • Business name if different
   • Address
   • Tax ID #
   • 1099 eligible field
2. Sort by 1099 eligible field — For the “yes” vendors, make sure you’ve got all the necessary information filled in. For the “no” vendors, scan to see if someone is marked as ineligible for 1099 but really should be. A weakness in QB is that in the vendor record this field defaults to “no”, so you never know if a “no” is really a “no” or the bookkeeper just forget to mark it “yes” after checking the W-9 status of the vendor.
3. Research and obtain W-9 information — Remember that vendors are required by law to return a W-9 form (PDF) if requested.
4. Put in place a 1099 procedure — New vendors shouldn’t get paid until they’ve been screened for 1099 eligibility and, where needed, sent you a W-9.