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W-9 Automation: Rapidly Process Your W-9 Forms

Skyrocket your company’s productivity with W-9 automation.

The W-9 form is the official Request for Taxpayer Identification Number and Certification. If a company determines their vendor(s) need a W-9 form, they can choose to let suppliers complete the W-9 form manually or automatically. Often, a digital W-9 is the more attractive option.

The complex and manual process of collecting tax information for the W-9 includes tracking all documents and ensuring everything is received. The traditional accounts payable approach is to mail a blank form to each new vendor with a letter requesting they complete it. 

But not every supplier makes your paperwork a priority. Sometimes, you have to chase them down for a completed form. However, it’s a must-have. The W-9 form is critical to ensure your own tax compliance is in order.

What is W9 Automation?

The IRS permits an alternative to issuing printed W-9 forms. A business can submit an electronic version of the W-9 form through digital capture. The wording for the IRS guidance states “Requesters may establish a system for payees and payees’ agents to submit Form W-9 electronically…” 

You have a responsibility to make reasonably certain the person accessing the system and submitting the form matches the identity on the W-9. The IRS also requires an electronic signature by the payee. This authenticates and verifies the digital submission. 

To make it easier for your business, there are a variety of tools that integrate with the IRS’ electronic process to further streamline the operation. Smart software and cloud platforms can collect the data as soon as a new vendor enters your system. 

Two Ways to Automate Your W-9 Management System

  1. Workflow Automation: These are apps that track the progress of each supplier to make sure nothing falls through the cracks. An audit trail is created through the entire procedure with automated notices and communications sent when data is missing.

This system typically comes as a template or portal that is launched across the entire business itself. Status updates on the 1099 and W-9 process are transparent and easily manageable.

  1. eFile Tools: These sites enable a business to expedite filing online. You import the data from accounting software managed by the AP department (like QuickBooks) and process the documents electronically.

There is still a lot of manual management in this option. Sometimes human resources is also responsible for collecting data.

Complete automation with business intelligence means you need a tool that considers the entire workflow process of tax documents. It’s an ongoing job that must be continuously managed. This is where technology provides a solution.

Is your business automating and digitizing global supplier tax compliance workflows?

Download our “Executive Summary: KPMG on AP Tax Compliance” to learn how your business can achieve 1099 tax compliance for global supplier payments. And look for the latest “Best Practices in Accounts Payable Tax Compliance with KPMG” free live webinar on CPAacademy.org (sponsored by Tipalti) for one hour of continuing professional education.

Advantages of Automating the W-9 Process 

Automated W9 management helps tremendously with tax compliance but there are several other factors that make digitization an attractive strategy.  Automation cuts down on incorrect information and speeds up the entire process. It facilitates invoice management and vendor finances. It helps you create a W-9 invoice, improve cash flow (less labor), and increase payment options. It’s a smart tool to perform tedious tasks so you can spend more time focusing on your business.

W-9 Automation Best Practices

Establishing automation for contracts with vendors or suppliers, freelancers, and service providers is a fairly simple process. The sooner you do it during the relationship, the better. Digitizing tax form collection allows you to completely automate the task of requesting, retrieving, and filing form W-8 and form W-9.

If you integrate this ERP tool with the onboarding process, there is barely any time invested at all. Artificial intelligence takes care of it for you. Payment is validated before it is ever processed. It also means you can be 100% aligned with tax compliance and regulations without lifting a finger. This type of tech gives you peace of mind when it comes to lowering tax risks.

An easy way to bridge this gap is to require all new suppliers to fill out tax forms or provide their VAT/local tax ID as part of a self-registration process. This guarantees your accounts payable process is streamlined and up-to-date with the latest tax laws. You should be able to set this requirement for onboarding regardless of whether a supplier hits the $600 IRS threshold or not. It’s your call.

Business Owners Who Don’t File

Do not rely on your suppliers at the last minute. Companies that don’t comply with 1099 filing requirements will receive a penalty. There are different types depending on the action whether it is a failure to file, filing incorrectly (intentionally), or failure to provide 1099’s to recipients. 

The IRS can penalize you for multiple counts. It’s not mutually exclusive. Thankfully, modern technology means manual processing is a thing of the past. Not only does W9 automation save on time and labor, it helps to reduce errors and mitigate risk.  

What to Look For in W-9 Automation Software 

When looking for the best software for W9 automation, seek a tool that makes it easy to collaborate. The platform should facilitate the collection of any data you need for an IRS form such as:

• Tax Identification Numbers (TINs)

• Company name, address, and phone number

• Real estate and assets

• B-Notices

• 1099 and 1042-S

• Information that supports W-9, W-8BEN, W-8BEN-E, W-8EXP, W-8IMY, W-8ECI, W-4 or Form 8233

All of this data is optimized for electronic signatures. The tool you choose must also continuously verify information to avoid any IRS penalties. Once data is entered, your software should have a built-in search engine to validate against thousands of IRS rules and regulations (including automated TIN matching). This saves time and helps prevent ID errors and issues.

A small business should look for a W-9 form automation tool with KPMG-approved tax form data validation and withholding calculations. Consider something that offers guidance for independent contractors. If you want people to figure it out for themselves, offer a little help. It doesn’t have to be a live person. It can be a wizard, bot, FAQs, or a PDF. The right content can help a vendor choose the correct form for their country and business structure.

At the end of the year, your tax tool should be able to automatically generate and send out 1099 or 1042-S tax preparation reports and calculate any necessary withholdings. Automating the W-9 process and using a digital W-9 form will keep AP processes efficient and organized. If your company does international business, your software should also be equipped for non-US payers.


Ultimately, you know your business best. How much time do you have to spend? Any room for error? The more you automate simple tax processes, the easier it is to drive business growth. Request a demo for how to scale W-9 processing and automated AP workflows.

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