Form W-9: 3 reason vendors don’t provide it, 3 viable solutions

    0
    14

    There are few things more frustrating and stressful for your finance team than when a vendor won’t fork over its Form W-9.

    And it’s something many finance teams deal with – especially this time of year. More than half (56%) of A/P pros said they struggle to get a Form W-9 from at least a few of their vendors around year-end.  And 19% of that group went so far as to say it always takes them a ton of effort. That’s all according to an exclusive poll from Keep Up to Date on Accounts Payable.

    Stop the struggle

    Unfortunately, when vendors don’t oblige, your company’s the one that suffers. Without the critical details a Form W-9 provides, Finance can find itself possessing incorrect tax information and facing IRS compliance issues, penalties and fines.

    So, the question CFOs need to get their finance teams thinking about is the why: Why don’t vendors oblige to requests? What’s holding them back from sending that Form W-9?

    Of course, you’ve heard the classic excuses. They never got your request. It was an overlooked message, a lost envelope, a missed call. But if you teach your team to regularly follow up with vendors and ensure the message was received, then they can get to the root of any other concerns.

    3 typical scenarios

    Check out three other reasons why vendors may not provide Form W-9 and what your finance team can do in response:

    1. They’re worried about security. Some payees may have concerns about broadcasting their sensitive tax information to the world, so they try to keep it under wraps as long as possible.

    Solution: Have your team explain why you need the Form W-9 (i.e., federal compliance). Then, to calm their worries, your team can spell out the specific security measures your company has in place that guarantee their information will be secure.

    2. They think it’s unnecessary. Since you don’t need to file 1099s for corporations, those vendors may think they don’t need to send you their tax ID information. But since Form W-9 is also how they officially acknowledge – and your company can confirm – their tax classification, you know it’s still best practice to have them on file.

    Solution: Your team should remind vendors that even if they’re a corporation, you still need proof of that tax classification for your own records. And a completed Form W-9 offers it.

    3. They don’t make it a priority. Because vendors have their own pressing tasks to worry about, sending your company a Form W-9 might fall to the bottom of their to-do list.

    Solution: Work with your IT department to make the process as painless as possible for vendors (i.e., electronic form and submission method). The easier and quicker it is for vendors to handle, the more likely they are to do it without complaint or continuous prompting.

    The post Form W-9: 3 reason vendors don’t provide it, 3 viable solutions appeared first on CFO Daily News.