How To Prepare to File 1099s for Your Clients with More Ease and Less Stress
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If you're a bookkeeper or accountant, it’s SUCH a great value-add to offer 1099 filing to your clients who need it. But there’s a problem: filing 1099s can be a struggle if you don’t have a process down! Since we only do this once a year, it’s easy to forget all the steps in the process and end up frustrated and pushing deadlines down to the wire. In this blog, we’re sharing our secret to a peaceful 1099 season so you actually look forward to filing them!
As a business owner, 1099s can be kind of mysterious and sneak up on you when it's time to file taxes. But as a bookkeeper, it's really common to let those 1099s sneak up on you and make you want to fully pull your hair out by the end of the year.
I'm here to tell you, you're not alone there - AND those days of frantically gathering and filing 1099s for your clients are sooo close to being over for good. As long as you follow along with the proven steps I'm outlining in this blog!
When you're working with bookkeeping clients, you'll probably want to offer 1099 filing for your clients who need it. It's something that really helps you add value as a service provider and support your clients during a stressful time of year (aka taxes!). Of course, you don't have to offer this, but if you'd like to, here's EXACTLY how I recommend you prepare and make it a seamless process year after year.
A quick overview of the steps required for a painless season:
Prepare everyone for 1099s
Get the right tech stack
Document your process
Rinse, repeat, and improve
As the owner of my second bookkeeping and consulting firm, I've been through the struggle of living a life pre-systems and processes. It's not ideal. Which is exactly why I've created a simple, repeatable process for gathering and filing 1099s - so let's get into it!
How To Prep for 1099 Season Like a Pro
The first thing you need to do is send a friendly reminder email to your clients who are eligible for your 1099 filing service. I like to do this at the beginning of Q4 so it doesn't get left till the last minute and we end up scrambling. And it doesn't help that all the different payment processors out there aren't always the most user-friendly, or automatically generate a 1099 for the client. You'll need to explain to your clients who opt-in for your filing service how to gather and send you the necessary documents.
We recommend you use some kind of database or tracking system to help you organize which clients will need to file 1099s and which can skip it.
Here's an example of the email you could send to your clients to let them know how to proceed:
Hey [NAME]! That special time of year is right around the corner. Yep, we'll be closing your books for year-end so you can file taxes for [YEAR] in just a few weeks/months, can you believe it?
One thing that's super important to address is filing 1099s. We do offer this service for [$X] as a one-time fee to file your 1099s for [YEAR]. If you'd like us to take care of this for you, just hit reply and confirm so we can send you instructions and next steps. If you'd rather handle it yourself, no worries! As always, we're here if you have any questions.
Simply send this out, wait for the responses to roll in, and get to work!
Find the Right Tech + Software to Support You
Here's arguably the most game-changing part of this process: the tech. This is so important for creating efficiency and ease into your processes, but remember that you don't have to use the exact tech stack we recommend! Pick what works for you and don't switch just because we use something different (unless you don't vibe with your current setup).
Here's what's working for us at the moment:
Asana for project management. This has consistently served us well by keeping everything we do, every single day, organized and easy to navigate. It doesn't matter if you have a team or if you're flying solo! Get yourself a project management system and start documenting your tasks (but we'll get into that later!).
Notion for client data. We use Notion for a TON of information and data storage in our business. In this instance, we use it for keeping track of which of our clients we need to reach out to at the end of the year to offer 1099 filing.
Track1099 for filing. I've used this software for years and I'm not planning on switching any time soon! They make it super easy to file our clients' 1099s in a seamless, user-friendly platform. PLUS it integrates with QuickBooks Online, Xero, and Bill.com. I honestly couldn't ask for anything better.
Loom for documenting the process. We talk about the benefits of using Loom to document your processes and create SOPs a lot around here. But that's because it's genuinely the BEST way to start creating repeatable processes. You can use them as training videos for team members, or watch them yourself as a quick refresher!
If you're curious about all the other tech my team and I use at Magnetic Bookkeeping & Consulting, you can find the full list right here.
Document Your 1099 Process (the Workflow Queen Way)
Hint: use Loom to record yourself! Everything from keeping track of which clients require the 1099 reminder email, to actually filing them, needs to be recorded. These are the actions that'll save you SO MUCH time every year after.
But here's where most people get stuck - they document the same process for each individual client. So they end up recording the same thing a bunch of times with small variations.
We don't suggest this method for documenting most processes. Instead, you can just record a generic version of "How to XYZ" and then add in the specific details for certain clients using notes.
*P.S. if you’re interested in snagging a fully laid out 1099 process that’s been tested year after year, check out my friend Brooke Swan’s (with Clarity Bookkeeping) 1099 Filing & Prep Process where she lays everything out for you to make it a smooth season
Stop Reinventing the Wheel, Just Make It Better
As with literally ANY task or process you repeatedly perform in your firm, it's crucial to have a strategy in order to be more efficient. I'm talking about templating workflows, documenting processes, and analyzing where you can streamline in the future.
Once you have a generic process mapped out and recorded, you can revisit it and make adjustments to improve it for next year. And you absolutely should! Because when you make notes on what could've gone better or which pieces were missing in your existing process, you'll save so much time in the long run.
If you don't want to create 1099 workflows from scratch, we've got you. It's one of the 30+ workflow templates we've included in Kickoff with Asana for Bookkeepers & Accountants to make your life as a firm owner 100x easier.9
Now you're ready to take on 1099 season like an absolute pro, and sail through it with ease!
Want to give Track1099 a try? We highly recommend it to any bookkeepers or accountants who offer 1099 filing services!
