Case in Point: 1099 Forms

The effort of filing 1099-MISC forms is just one of the many ways that the federal government wastes small businesses’ time during tax season. The 1099 submittal process should be easy to modernize: the forms aren’t complicated, and don’t appear to change that often.

Preparing those forms should be quick and easy for business owners or bookkeepers, especially when using a good accounting tool, like QuickBooks. If you’ve coded your bookkeeping entries properly, all the source data is already stored in QB: from the amounts paid to each 1099 contractor, their name and address; to the EIN unique identifier the IRS uses for your business.

Alas, there is no intelligent link between QuickBooks and the 1099 forms.

Even though the IRS is perfectly happy to receive 1040 tax returns via an approved eFile resource, they do not allow small firms to file 1099 information forms electronically or fill in the Acrobat forms available on their web site.(There is, however, an enterprise-scale service for that.)

Here’s the friendly notice from the IRS, warning businesses not to use the Adobe Acrobat version of the 1099 input form:

This form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. Do not file copy A downloaded from this website. The official printed version of this IRS form is scannable, but the online version of it, printed from this website, is not. A penalty of $50 per information return may be imposed for filing forms that cannot be scanned.

You must file using the IRS’ preprinted forms, although there is a time-consuming method you can use with QuickBooks. The benefit of this approach is that the data will be faithful to whatever is stored in your accounting records. No risk of typos created during the form entry process.

The IRS apparently relies upon an antiquated method that was state-of-the-art back in the go-go days of typewriters and carbon paper for duplicate copies. They require firms to fill out multi-part 1099-MISC forms using a method that can be scanned easily by the IRS — or risk a $50 fine per return. It’s vital to the IRS that they receive Copy A of your 1099 form printed on their preprinted, red form.

I can’t help but wonder: if the banks can somehow manage to scan and process checks printed from QuickBooks, why can’t the government scan a form printed by QuickBooks? It’s not as if this is a design-intensive, highly variable document!

Today’s Solution for QuickBook Users

Today’s work-around is to print each page of the multi-part 1099 form separately – for each 1099 contractor – as explained here by Intuit, unless you have a continuous printer. Assuming you work out the alignment issues between QuickBooks and your laser printer, this method works just fine, but it requires considerable attention to detail and a lot of time. The more 1099 contractors you have, the more time it takes.

Be careful: the paper for all but the first copy of the 1099 form is flimsy. Your laser printer may jam if you try to rely upon automatic paper feeding, rather than printing one page at a time. Manual feeding, one sheet at a time, was the most reliable approach for my HP LaserJet P2055 printer.

In theory I don’t mind notifying the government what I’ve paid to independent contractors. But in practice I resent how much unproductive time must be spent to send this information to the IRS.

Let’s hope there’s a better way in 2012, given Obama’s call to streamline government’s impact on business.

With its most recent release, QuickBooks Pro 2010, Intuit has convinced me they’ve decided to walk away from their origins as a customer-focused software provider. They used to be a shining example of customer centricity, and now they strike me as having adopted the persona of a me-centered teenager.

Bloatware?

QuickBooks in the early days was a great example of function drives form: like an entry-level BMW, it did what it was designed to do really well, without a lot of frills. And like a 3-series Beamer, it used to offer good handling and very nice performance.

Nowadays (much like current 3-series BMWs) QuickBooks feels sluggish, bloated – perhaps designed by committee or product managers overly incented by up-sell revenues. (More on that shortly.) The UI has gotten encrusted with features, and the snappy performance disappeared years ago.

For Whose Benefit?

I was peeved at having to buy the 2010 version, just to run my accounting system on an upgraded PC with Windows 7. From my research the feature delta between 2008 and 2010 not worth the upgrade price, at least for my business. But this was clearly a case of planned obsolescence, to drive their revenue engine, so I ordered the upgrade.

Starting from the perspective of a reluctant upgrader, now I’m really  annoyed — by the multiple ways in which Intuit signals that it no longer cares to invest in processes that learn from customer interactions. As a result they waste my time on processes that benefit them, but not my business.

Since my upgrade a few days ago, I’ve found QuickBooks and the customer experience delivered by Intuit to be on a downward glide path from their previous quality standards. It took several attempts to install without crashing on my high-end Vista PC. The installer’s UI was unreadable at times, so it was not clear when or what to click. After an hour of gnashing my teeth, I finally managed to get the software installed properly.

What’s Wrong with Their CRM?

And then there’s the fairly lengthy registration process. I’ve been a customer for more than a decade, but they still ask the same questions every time I register online – despite the fact they’ve clearly saved my profile in a CRM record somewhere (based on comments from their rep).

Before you can complete the registration process, of course, there’s the dreaded call to a customer service agent to get a “validation code” in order to activate the software. What with hold times and the questions they have to ask, that process took 2 tries and about 10 minutes total. (I gave up the first time: on hold for 4+ minutes with no feedback from their phone system as to whether my call had been disconnected, or was in a queue.)

Annoyingly, the rep asked several questions that I’d previously answered moments before via the registration form. His system was slow so it took him almost 5 minutes to supply the validation code to activate the software. (He was quite embarrassed at our mutual wait.)

To his chagrin and my dismay, QuickBook’s UI on my PC did not work as expected, so we were unable to verify that the activation code was actually installed properly. (So far, so good, but I may discover next week that I have to repeat the validation interaction with a CSR.)

I find myself wondering, why can’t they just complete the activation process electronically, the way everyone else does? There’s no value to the customer in the phone-based process – it simply exposes us to more unwanted service pitches. It’s not a constructive use of our time, although I understand why Intuit wants to put us through this.

Is It Bloatware – or Ad-Ware?

One of the most annoying things about their recent product releases is the way they lard the UI with links to online services they want to pitch you. There’s no obvious cue in the UI (by design, no doubt) to tell you which of the icons on your display represent features already installed, and which are simply “up-sell links.” I can tell it’s going to take a while to learn which icons or screen real estate to avoid…

Today I was forced into an online “wizard interaction” to decline services I’ve declined twice already this week (via the registration process and the rep). What is wrong with these guys?

I already hated the fact that my prior 2008 version would repeatedly try to up-sell me features I’d previously declined – sometimes more than once a quarter. How many times do I have to say no before they stop asking? It looks like this behavior has continued into the 2010 version.

Besides what it implies about Intuit’s unbridled commercialism, what’s so infuriating about these embedded ads is that they interrupt the user’s concentration and workflow. There’s no way to turn them off. They distract us from our task focus. We’re doing our accounting because we have to, not because we love spending our time here.

It appears that Intuit has decided to treat the QuickBooks customer experience as if we had agreed to operate under an “ad-supported” content model. And yet we customers are paying fairly hefty fees to upgrade.

We’re operating under a paid-for content model, so they should stop their “interruption advertising” behavior and let us focus on getting our accounting done, with as few interruptions or distractions as possible.