I’ve done quite a bit of searching on the forum to try and uncover any “established workflow” that someone might be using to help guide them through the process of processing Form 1099s whenever a modification to a Form 1099-MISC or Form 1099-NEC has been introduced by the IRS.
I am fully aware that not all workflows are going to fit all companies and their Finance/Accounting requirements concerning the Form 1099. However, workflows are typically a good tool from which to mimic, especially if you have no clue what you’re doing (as often happens to me when engaging a procedure for the first time, without prior knowledge).
With some information provided by @TomAlexander relative to the “Country Specific Functionality” (CSF) guide in this post, I was able to understand the necessity for creating new 1099 Form Types, Box Numbers, and 1099 Codes. Thanks, Tom!
But - there’s a fairly complicated workflow behind this involving Accounts Payable.
I need to understand that piece of the pie, too, in order to have success at supporting it.
In my testing of this seemingly nebulous and undocumented process, I have established a rudimentary workflow concerning what the ERP Administrator should focus on, as well as, what a finance/accounting employee might need to focus on. I do not know if it is correct, nor do I know if I am missing anything important.
I would like to ask the forum’s help in simply taking a look at my general workflow (outlined below) and let me know if these steps seem accurate.
Am I missing anything? Does it even make sense?
Scenario:
IRS introduces changes to a 1099-MISC or 1099-NEC. Not sure when this
typically happens, but let's assume they do it and provide no public
announcement concerning these changes until Nov/Dec time frame.
As such, any invoice your business has entered into the ERP system
throughout the year (prior to the Nov/Dec time frame) would not know
about any new 1099 Form Type and associated box numbers you might need
to create at the end of the year.
As an Epicor ERP administrator, you investigate and discover that
several box numbers have been switched around, as well as, the
addition of a new box number.
In Epicor ERP, you would:
ERP Administrator ----->
[ 1] Create 1099 Form Types for the new 1099-MISC and 1099-NEC
All supplier records and invoices for the current tax year
are not in alignment with the new 1099 changes that the IRS
has introduced.
[ 2] Create new 1099 Box Numbers for the new form types
All supplier records and invoices for the current tax year
are not in alignment with the new box number modifications
that the IRS has introduced.
[ 3] Create 1099 Codes to tag the new 1099 Box Numbers
[... and of course, there's the whole SSRS/RDL field alignment effort, new Report Style creation, etc]
Finance/Accounting Personnel ----->
[ 4] For 1099 suppliers, select the new 1099 Form Type and 1099
Code (box number) in the Supplier module.
[ 5] Using, "AP Posted Invoice Update", go back into all invoice
records for each "1099 supplier" and adjust the 1099 Type and
1099 Code on the "Lines/USA" tab.
[ 6] Print out a copy of the "1099 Report" for the current tax
year and 1099 Form Type, which should show all of the
suppliers, along with their itemized invoices, who have not
yet had a Form 1099 generated (the supplier should be listed
as "Not Generated" for their Form 1099).
[ 7] Go to the "1099 Generation US" module and generate new forms
for the 1099 Form Type that you need to process.
[ 8] Go to the "Print 1099 Forms US" module and print out all 1099s
for the current tax year and associated 1099 Form Type.
[ 9] Cross-check the printed 1099s (total compensation box; whatever
number that will be) against the total of all itemized invoices
for that supplier.
How does this compare to what everyone else might be doing?
Thanks for reviewing and helping out.