You Need Affiliate Program Software Even if You Outsource

The key to successful affiliate program management is the proper affiliate program software. Even if you outsource your affiliate program, you need some way to keep track of all of your affiliates. The question is, “Do you want to completely give up all control of your tax records to another company?”

The Importance of Record Keeping
Yes, when you outsource your affiliate program, the company should take care of all the important tax information. They should collect W9s and they should have 1099s ready for you to send out. However, the keyword is should.

Whether or not the company keeps track of this information makes no difference to the IRS. All the IRS cares about is collecting the taxes due. Now, you will not have to pay taxes on the money you paid your affiliates, if you have proper records. This means you will have to send every affiliate that made over $600 a 1099.

Essentially, a 1099 passes the responsibility onto the affiliate. Without it, you will be held liable for the money you paid the affiliate. In order to send out this very important piece of information, you will need to collect a W9 on all affiliates. Ideally, your affiliates will fill out this form before you ever pay them a dime.

Affiliate Program Software Can Help
At the very least, you need to have software that can keep track of all the W9s and 1099s. It is even better if the software can take the W9s and payment information to create the 1099 for you.

If you are outsourcing, you will not want any additional expenses. This is understandable and easily accommodated. You can find software that tracks this information and costs you nothing. Generally, a nominal fee is passed on to the affiliates but it is so small that your affiliates should not complain.

In Case of an Audit
No one likes being audited by the IRS. It is a tax nightmare that no one wants to go through. However, if you have appropriate software, answering IRS questions will be easier than you think.

The IRS is all about paperwork. This means you will need to keep all the records of all the affiliates, all the payments, and everyone’s tax information. Generally, records should be kept for a minimum of seven years. This can mean hundreds of affiliates and thousands of payments you need to track.

When you use affiliate program software, all the information is easily accessible and centrally located. Of course, you will want to back up your files and back up your back up offsite. This will ensure you have all the records you need even if something happens to your computer, your company, or your building. You never know when fire, flood, or natural disaster will strike wiping out all your files.  Therefore, backing up your information offsite is vital.

When tax time rolls around, you will be glad you took the extra precaution. In addition, if you are ever audited, you will be thankful that you have your records and possibly the records of your affiliate management professionals to back you up.

Tagged with: Affiliate • even • Need • Outsource • program • software

Filed under: Affiliate Program Directory

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