The IRS has become more stringent in enforcement of the rules and regulations regarding 1099 contractors in an effort to close the $450 billion tax gap. This has led to an increased liability on not just the business owner, but the accountant as well. The verification process has never been more crucial; it can be a painstaking endeavor when end of year rolls around and you need to make sure each vendor is verified and all of the pertinent information is correct and up-to-date.

Creating an audit trail of the efforts the accounting firm makes in collecting the data and verifying accuracy can alleviate much of the liability. Scalus provides a central location for the firm to not only automate that process, but communicate with clients, vendors and staff equally all while creating an audit trail for record keeping.

With an automated workflow product, you can create a template that has each task listed and assign each task to the appropriate person, team or department. For example, generating and downloading a transaction list by vendor would be assigned to the bookkeeper. While merging the two QuickBooks reports would be performed by the tax operations department. Each process is assigned to the appropriate department, and once one task is complete the baton is passed to the next department, notifying them that they have a task due. Here is an example tasklist template for 1099 workflow:


With Scalus, each client is assigned an email address; this allows the client to email into the system directly from their internal email client and have a task created for the firm that they can then follow progress on without having to ask for status updates. Managers in the firm can go to a single dashboard for visibility into all of the work that needs to be completed, and prioritize deliverables.

This dashboard is a powerful feature in capturing client needs without anything falling through the cracks. In every business, clients become accustomed to going to a single individual to resolve their problems. The issue then becomes if that staff member is out sick, on vacation or no longer works for the organization the email from the client sits in their Inbox until someone looks for it. This creates frustration for the client and time lost for the firm in getting the work done. Scalus solves this dilemma by creating an unassigned work bucket from the client emails.

Automating your 1099 contractor verification process allows you to monitor each step as it’s being done and allows you to easily spot bottlenecks in the process. It also creates an audit trail to protect the firm and empowers your team. Interested in learning more? Scalus is hosting a free webinar with Tax1099 on December 17th at 11am Pacific Time. It will be a roundtable discussion with two innovative firms, Keeping Your Balance and BackOps, about how they transformed the 1099 workflow process to avoid PTSD during tax season. Join us and learn how you can too!