Guide for End-of-Year AP Best Practices

Transcription

1 HOW-TO Guide for End-of-Year AP Best Practices

2 Contents Year-End Checklist for Accounts Payable Sample Year-End Calendar Master Vendor File Clean-Up and Maintenance 1099 Misc. Reporting and Corrections 2

3 YEAR-END CHECKLIST For Accounts Payable Establish a calendar that contains all deadlines 1 6 and due dates Review vacation schedules to ensure adequate 2 7 AP staffing Remind all employees of invoice and T&E 3 8 deadlines for 2015 Review 1099 supplier information to make 4 9 sure it s complete Perform open PO analysis of what has been 5 10 received, but not invoiced Assign year-end related tasks to appropriate team members Research and properly account for any outstanding checks Establish proper procedures for invoice and T&E accruals Make sure that all invoices that have been received are entered into the system Review all invoices received shortly after the new year to determine if they should be accrued 3

4 DECEMBER 2015 Sample YEAR-END CALENDAR For Accounts Payable SUNDAY 31 MONDAY Review vacation schedules to ensure adequate AP staffing. TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 2 Review 1099 supplier info to make sure it is complete Send to all employees about submitting all 2015 expenses to AP Open PO Analysis of goods received, but not invoiced Send reminder to all employees about submitting all 2015 expenses to AP Make sure that all invoices that have been received are entered into the system. 31 AP Closes (No additional invoice or T&E entry for 2015 after 5pm.) 4

5 JANUARY 2016 Sample YEAR-END CALENDAR For Accounts Payable SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 2 HOLIDAY! 3 4 Accrue 2015 AP invoices and T&E. Order 1099 forms and envelopes. 5 Accrue 2015 AP invoices and T&E. 6 Accrue 2015 AP invoices and T&E. 7 Accrue 2015 AP invoices and T&E. 8 Accrue 2015 invoices over $5K Accrue 2015 invoices over $5K. Accrue 2015 invoices over $5K. Accrue 2015 invoices over $10K. Accrue 2015 invoices over $10K. Begin 1099 process. Review payment reports Continue 1099 process. Make sure all reportable payments are flagged. Continue 1099 process. Make sure all reportable payments are flagged. Make any necessary adjustments to 1099 s. Make any necessary adjustments to 1099 s Auditors Arrive Print and Stuff 1099 s Mail 1099 s 5

6 Master Vendor File Database Key Role Financial Stability Taxpayer ID Number Validation Name and Address Validation The Federal Government Setup is Critical WP TIN 6

7 Master Vendor File Database Best Practices Restricted Purge Audit Changes and Additions Master Vendor File Clean-Up Standardize Data Duplicate Vendors 7

8 1099-Misc Reporting Form 1099-Misc? Independent Contractors Certain Types of Vendors Sub-Contractors Attorneys ez $600 or More Cash Payments to Fishermen Prizes and Awards Proceeds Paid to Attorneys Rent Services (Including Parts and Material) 8

9 1099-Misc Corrections Two types of 1099 corrections that can be filed: Simple or Error Type I Corrections Complex or Error Type II Corrections - OR - 9

10 1099-Misc Corrections Continued Simple or Type I Corrections: Incorrect Payment Amount Incorrect Payee Name Incorrect Payee Indicator Return Filed in Error (One should not have been sent.) 10

11 1099-Misc Corrections Continued Complex or Type II Corrections: No Payee TIN Incorrect Payee TIN Incorrect Payee Name and Address Incorrect Return Filed (1099-Misc Instead of 1099-INT) 11

12 1099-Misc Corrections Continued When Not To File Corrected Returns Simply because a payee requests a corrected return does not mean the payer is required to file one. The payee presents new information and requests a corrected return after the return is filed. The payee is an exempt recipient, such as a corporation. A contractor requests that only their fees be reported, and not reimbursed expenses. 12

13 1099-Misc Corrections Continued Did you know? Payers do not have to file corrections in the same manner as the original returns. If a payer has 250 or more returns they are required to file electronically. The IRS requires that only the corrected returns be sent when filing corrections. Make sure to check the correction box! Corrections can be filed for the past three years; four if there is backup withholding involved. 13

14 This resource was created just for you, by AvidXchange. It s clear you like best practices. Learn why over 5,200 companies have selected AvidXchange to streamline their Accounts Payable processes, and implement best practices across their teams to improve efficiency. Want to see the software in action? Check out our solutions page: