Improving the efficiency of financial operations while maintaining compliance is critical to the success of any growing business. One of the proactive steps that can help improve the efficiency and accuracy of your tax compliance is TIN Matching. This simple but important verification process can have several significant benefits to your business. Here’s a closer look at the Top 5:
TIN matching saves time
It’s no secret that tax filing season can be a very busy and stressful time for many accounting teams. By utilizing TIN Matching throughout the year when onboarding new vendors and payees, you can save a significant amount of time. Being proactive with TIN Matching means you can identify errors right away and correct your data throughout the year. By doing this, you can have confidence that you have the correct name and TIN information on file and won’t be scrambling to collect this information during filing season. Not only does this free up time to work on other important tasks, it also means less stress during year-end filing.
Proactive TIN matching can save money
Though it may seem inconvenient to conduct TIN Matching on the front end, completing this important step can have a significant financial impact on your business. By utilizing TINCheck’s TIN Matching Services, you can ensure you are submitting accurate TIN, name and address information on all of your tax forms. Because you took the time to verify this information up front, your chances of receiving B-notices or penalties from the IRS are significantly lowered. With potential IRS penalties of $290 per form for a TIN/name mismatch, and up to $3.5 million for large businesses, it’s crucial to get this step right the first time you file.
Streamline your vendor onboarding process
Onboarding new vendors correctly is a critical process to maintain compliance. One step that should be included in your onboarding process is TIN Matching. It is considered best practice to collect a W-9 from a new vendor at the time of onboarding and conduct TIN Matching at the same time. By verifying TIN/name combination during the onboarding process, you can catch any errors (transposed Tax ID’s, incorrect company names, etc.) and have time to receive updated, accurate information for your vendor master file. This process not only saves you from IRS B-Notices and potential penalties but can eliminate time consuming rework later on.
Develop an audit trail
One often overlooked aspect of the tax compliance process is to have a documented process along the way. By verifying the TIN/name combination of your payees, you create a documented action of proven due diligence to minimize errors on your filed tax forms. This process can come in handy should your company ever be audited.
Know your customer
It’s important to protect your organizational reputation by understanding who you are doing business with. Your organization must understand your customers, vendors and business partners and part of this due diligence is to ensure they are not on any government sanctioned watchlists. Utilizing TINCheck’s TIN Matching services not only verifies TIN/name information, but also verifies compliance against more than 30 global watchlists to verify trade, ethical and financial compliance. Knowing your customer verifications will give your team additional confidence that your business is taking the necessary steps to maintain compliance.