Re: Billing Problems with Corporate Client

[Faun deHenry <faun -at- SANCITY -dot- COM>]

Jon:

Perhaps getting rid of unknown vendors is a byproduct of approved vendor lists. My
experience is that approved vendor lists are due more to companies moving from
proprietary, unintegrated management systems to enterprise software (i.e., SAP, Oracle,
BAAN, PeopleSoft, etc.). All of these products introduce the concept of a master list of
vendors. The argument used by the process re-engineering consultants is that prequalifying
vendors streamlines the payables process. This makes the accounts payable department more
efficient enabling the accounting manager to redeploy resources elsewhere or downsize the
department. I'm sure you get the picture. ;->

Working in concert with Enterprise Resource Planning (ERP) or Business Process
Re-engineering (BPR) efforts is a movement in the quality arena to establish alliances
with select quality vendors. This approach is gaining popularity with many manufacturers.
The Saturn division of General Motors uses this model with reasonable success.

As to becoming an approved vendor with some corporate giant, I've only known one small
company that accomplished it. The organization's two principals spent nearly three months
preparing the paperwork required for the three qualifying rounds necessary to get them on
the final list. 

The 1099 issue is different in that the IRS is scrutinizing companies that contract with
sole proprietors or partnerships. Some state bureaucracies are also looking at contracting
situations very closely. As far as I can tell, this is solely about money. The Feds hate
contracting because it is difficult and costly to track. Even with the 1099 filing
requirement, the IRS spends, in its estimation, too much time and effort trying to get its
money from IC's. I know that the Franchise Tax Board of California feels similarly.

Faun deHenry


Jon Leer wrote:
> 
> This is ridiculous but common. The notorious "approved vendor list" is a
> great way for large companies to get rid unknown vendors. Getting on the
> list is an elusive process (e.g., I have never gotten a straight answer out
> of Digital regarding how to get on their list).
> 
> However, your comments regarding working through an agency is more than
> simply whose name is being used. It has tax consequences. Almost always the
> agency requires that you work under a W2 arrangement. Whereas, 1099 terms
> allow you to get the full fee and pay taxes per your own arrangement with
> the IRS.
> 
> Jon Leer
> 
> P.S. I would like to hear more from other members of the list regarding
> getting on a company's approved vendor list.
> 
> ----------
> > From: SLSTAGGS <slstaggs -at- AOL -dot- COM>
> > To: TECHWR-L -at- LISTSERV -dot- OKSTATE -dot- EDU
> > Subject: Re: Billing Problems with Corporate Client
> > Date: Wednesday, January 07, 1998 3:40 PM
> >
> > <<We just got a new contract from this "temp agency".
> > They want us to provide a ton of documentation, including
> > articles of incorporation, Fed Tax ID certification, their
> > questionnaire, and proof of a total of 4 million dollars of
> > liability insurance. (BTW, we work exclusively offsite and
> > currently have no employees.)>>
> >
> > Strange. I've been in a similar situation, where the company (usually a
> > huge one) wants to hire me directly but can't put me on their list of
> > "approved vendors" for various reasons.  So I work through the temp agency 
> > in name only. My rate doesn't change, the temp agency has no control over me
> > managerially, and all I've ever had to do was register with the agency. 
> > However, when I do this, I don't work under my company banner but as an 
> > individual contractor. Technically, you're an employee of the temp agency 
> > in these situations...maybe the answer lies in working for them as 
> > yourselves versus working for them as a corporation...your "corporateness"
> >  could be frightening them into being weird.
> >
> > Good Luck -
> >
> > Susan
> >
> >
~~~
> > Send commands to listserv -at- listserv -dot- okstate -dot- edu (e.g., SIGNOFF TECHWR-L)
l,
> >
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