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Client advisory services (CAS) have become an increasingly popular and profitable offering for accounting firms looking to extend value. With it, firms can use strategic insights and actionable advice to build stronger client relationships and attract new business.
CAS can also help provide a runway to revenue. Instead of being a “static” offering, firms can expand CAS with additional services to ease the burdens of busy business owners.
One area of particular interest is 1099s.
According to the 2022 CPA.com & AICPA PCPS Client Advisory Services (CAS) Benchmark Survey, CAS practitioners ranked 1099 creation and filing as the most in-demand CAS service.
Typically, 1099 services bring scalability challenges, limiting growth and profitability. Now, that is changing with automation.
The challenge of a manual 1099 service
1099 reporting is a crucial compliance requirement for many businesses. The process to collect, create, and file them for clients often comes hand-in-hand with time-consuming complications, such as:
- A high volume of forms - Clients often work with numerous freelancers, contractors, and other vendors that require 1099s. Stretched out across an entire client base, firms can be facing a tidal wave of forms to manage and file.
- Vendor management - Firms need to work with 1099 vendors to ensure information like tax ID numbers and addresses are accurate and offer easy access to files for them.
- Tight deadlines - Many businesses need to file by the end of January, meaning firms face one month to manage, file, and deliver 1099s to clients’ vendors.
- Need to manage and pay for multiple systems - Technology can be helpful but these tools can come with limitations, meaning your firm has to integrate, manage, and pay for a separate system. If not integrated, then your firm has an additional step of exporting data from one system and importing into another.
With factors such as these, the service leaves ample room for improvement and efficiency gains.
Using AP software and automation for 1099 services
Technological innovations enable you to streamline and scale 1099 services, meaning you can collect, create, and file your clients’ 1099s right from your AP software.
The end-to-end process includes collecting W-9s, marking vendors as 1099-eligible, mapping expenses to the correct 1099 category, generating 1099s, filing them, and delivering the file to vendors.
Within the software, you can request W-9s, click a few buttons to generate 1099s for vendors, and then your AP software takes care of the rest. It’ll send the 1099s directly to the IRS and file state1 and federal tax filings.
The results? You can significantly reduce time and resources dedicated to this process with workflow automation, ensure greater accuracy, and better meet deadlines. It also means one less software to pay for, train on, and integrate.
Scaling for CAS
How does this translate for CAS?
With this technology, you can scale in several ways:
- Handle more clients without adding resources - The efficiency gained through automation allows firms to manage 1099s for a larger number of clients without significantly increasing staff or work hours.
- Offer tiered service packages - Firms can create tiered service packages, offering basic 1099 management to some clients while providing more comprehensive services to others with more complex needs.
- Offer year-round value - While 1099 reporting is typically an end-of-year concern, firms can provide year-round value by offering ongoing monitoring and advice related to 1099 compliance.
- Free up time to focus on advisory services - By automating the technical aspects of 1099 reporting, accountants can spend more time on high-value advisory services—like helping clients understand the implications of their contractor relationships and optimize business practices.
How to start
Incorporating 1099 management and automation into CAS offerings allows your firm to provide a valuable service to clients while efficiently scaling operations. By automating the complex and time-consuming aspects of 1099 reporting, firms can focus on delivering strategic advice and building stronger client relationships. As businesses increasingly seek comprehensive financial services, offering tech-enabled 1099 management as part of CAS can be a significant differentiator for firms.
Here’s how you can learn more about how to start with 1099 creation and filing for your CAS clients.
If you’re a BILL customer and want to learn more, send us an email, and we’ll connect you with your account manager.
You can also visit https://www.bill.com/product/1099-filing to read more about automation for AP and 1099s and request a demonstration.2
1 For states participating in the CSRF tax filing
2 Each 1099 created will cost $1.99 for our accounting partners and $2.00 per 1099 if delivered via USPS.
