What do businesses do when purchasing from bots? Hope me accountants!

November 20, 2018 10:35 AM

Our accounting department always expects to get a W-9 for any new vendor and gets very bristly if this is not provided. This causes a lot of delays when the vendor is an automated web site (e.g. providing a software license key) and there are almost no humans involved (or contact emails are scarce). What is the modern way to purchase things quickly in an IRS-compliant way from nearly virtual companies without weeklong delays? (This is for a US-based business, some of the purchases could be international.)

(I am extremely ignorant of accounting so please excuse any misused terms.)

posted by benzenedream to Work & Money (7 answers total)

We have company issued purchasing cards for places like this, that won't issue us W9s or do invoice billing. The purchase cards come with company reporting requirements that I assume are used to fulfill proper accounting needs.
posted by msbutah at 10:45 AM on November 20, 2018 [2 favorites]

One of the big reasons the accounting department is insisting on a W-9 from new vendors is because the amount of commercial billing/invoicing fraud has exploded. It's at the point where, in order to be reasonably certain you're dealing with an actual company and not a fraudster is to demand a tax document from them.

Tl;dr: accounting wants assurance that the vendor is really real, not impersonating a legit company, and not an outright fabrication.
posted by Lunaloon at 11:14 AM on November 20, 2018 [1 favorite]

You can try google searching . Many of my vendors provide a pdf link online. It isn't always easy to find at their website but googling can sometimes get you there.
Having said that, purchase cards with low limits on per purchase spending and per day spending have worked in the past. The key is to figure out with your Finance Dept. what tools you have at your disposal BEFORE making purchases.
posted by calgirl at 12:22 PM on November 20, 2018 [2 favorites]

I have a company credit card that I can use for certain types of pre-approved purchases. Some things are covered by standing orders that allow me to purchase them as necessary, whereas others require approval on a per-purchase basis. In all cases, I need to submit a receipt or a payment confirmation. This allows me to do stuff like pay for building permits, or software, or a new tape measure. It's tracked differently from things like electrical supplies or inverters or solar panels, which we order from our regular vendors.
posted by Anticipation Of A New Lover's Arrival, The at 4:22 PM on November 20, 2018 [1 favorite]

Kinda like msbutah's, we can also use our own personal form of payment and then submit for reimbursement (or we can use company credit cards). Either way, the assurance of it being a 'real' transaction then comes from a manager affidavit.
posted by Tandem Affinity at 7:14 PM on November 20, 2018

Best answer: Our accounting department always expects to get a W-9 for any new vendor and gets very bristly if this is not provided.

Are you positive that your accounting department doesn't have a way to distinguish 1099 from non-1099 vendors? That would not be conventional, to expect W-9s from literally all vendors. Since you won't be submitting 1099s for the non-1099 ones, getting a W-9 is absolutely no guarantee of legitimacy because they could just write down whatever they wanted on it, so I have no idea why a company would use this in lieu of some more sensible purchasing practices.
posted by Sequence at 7:48 PM on November 20, 2018

I work for such a company (very few humans involved, providing software license keys), and we provide our EIN and VAT id on our website for folks who need it. I have no idea if this is a common practice, but it seems to me that the EIN provides about as much info as a W9 does.
posted by freezer cake at 9:52 AM on November 29, 2018 [1 favorite]