I know, I know. You're really not that interested in QuickBooks, but as an author, maybe you should be. Literary agencies tend to do their accounting in QuickBooks, Quicken, or a custom program such as LAMP. Some may use larger accounting packages, also. I don't imagine WME or CAA are using QuickBooks!
That said, I've been a QuickBooks user since 1994 and a Quicken user since V4 for DOS. I've set up two literary agencies on QuickBooks and I think I know the ins and outs pretty well.
One thing that QuickBooks did well—much to my surprise!—was that it launched Direct Deposit for Vendors as a part of its Payroll program. While the program wasn't perfect—it does not allow you to choose which account to draw from and limits you to just one—it was pretty good. For those authors who were always looking for wires, it offered a much cheaper alternative. In fact, given the increase in the price of postage, I'd say we're about breaking even by paying the $1.50 per payment Intuit charges versus cutting and mailing a check. I recently asked all of my clients to give me their Direct Deposit info so that I could stop mailing checks.
Now might be a good time to point out that Intuit also has bill-paying services: http://quickbooks.intuit.com/product/add_ons/bill_pay. This service has a monthly fee. Direct Deposit for Vendors doe not have a monthly fee. It just costs $1.50 per payment. "QuickBooks Bill Pay is FREE for the first month. After your free trial, the service is $15.95 per month for up to 20 payments, and $6.95 for each additional set of 10 payments." Now that's only about 80 cents per payment for the first 20 payments, which isn't bad and is cheaper than the Direct Deposit service, but let's say you don't have that many bills to pay every month. A lot of us have auto-debits and maybe a credit card or two and otherwise may not have a lot of bills to pay. DDfV is the better option there.
Apparently a lot of folks must have realized that, because Intuit has just changed the name of its program from Direct Deposit for Vendors (really anyone you pay) to Direct Deposit for Independent Contractors (http://payroll.intuit.com/support/kb/1002015.html). As I understand it, if you do not check the 1099 box and include a tax identification number, you're not going to be able to pay that party with Direct Deposit for Independent Contractors.
But not all "independent contractors" are individuals. Some are corporations or they are individuals who have incorporated. The IRS does not require you to send a 1099 to a corporation. But now Intuit will.
If you go to http://payroll.intuit.com/support/kb/1002015.html and read it, there's a bunch of links to the IRS about identifying "independent contractors." Go check them out; I'll wait.
Okay, did you see what I saw? There is not one thing on these IRS pages that says Direct Deposit can only be used for Independent Contractors. There is nothing here that justifies Intuit making this change other than because it is losing business on the BillPay side. At least that's my personal conclusion.
Now, Intuit might argue (I spoke to a rep who didn't quite go here but almost) that because Direct Deposit for Vend—sorry, Independent Contractors—is part of the Payroll Service, you should not be using to pay "bills." Bullsh!t.
I have been an independent contract and I use independent contractors. How do independent contractors get paid? By billing the client! Hence, every payment to an IC is in response to a bill. By Intuit's reasoning, we should be using BillPay to pay these and not DDfIC.
This is, pure and simple, a blatant attempt by Intuit to cut services to users and stop users from using DDfV to pay bills Intuit thinks you should be paying $15.95 to the BillPay Service to pay.
And this is really just another example of Intuit and QuickBooks having so many heads, most of which are up this Hydra's rear end.
- Direct Deposit for Independent Contractors
- Intuit Payment Network
- Intuit Merchant Services
Each of these is an Intuit service to pay or receive payments and they are all in competition with each other. No wonder PayPal eats Intuit's lunch every day.
So let's talk about PayPal for a second. I have looked extensively at the fees for PayPal and IPN and IMS and what I found is that PayPal was cheaper, period. And IPN is cheaper than IMS. And IPN is now integrated into QuickBooks, so why on earth would you use IMS? Because you use a credit-card reader at your store? Okay. Point taken. But then aren't there even cheaper options, still?
Long before Amazon launched the Kindle and tried to "put the store in your hands"™ (my ™ , not theirs), Intuit was putting the store on your desktop with QuickBooks. Ads for new services galore. I don't even see the "order checks" button anymore. QuickBooks users have long ago learned to ignore the clutter of Intuit advertising and the blowback has obviously been severe enough that Intuit has curbed a lot it.
But it is their playground and if you want to play with all the toys, you have to pay the price. Or maybe, more appropriately, if you want to use the bathroom or get a snack, you have to pay the price. See, they control the services that integrate with QuickBooks. And the apparent utter failure of the QuickBooks Marketplace (http://marketplace.intuit.com/find-software.aspx; go ahead and look for anything you've ever heard of) shows how bad they are at giving customers what they want.
And what do they want? Well, for starters they don't want to be paying $15.95 a month when they can pay less as they go. But, even more, they want decent PayPal integration. Not the clunky add-on that PayPal offers or the even clunkier task of exporting from PayPal and importing to QuickBooks. Just make it work the PayPal the same way it works with every other financial institution. Put your customers' needs and wants first, dammit, and cut a deal with PayPal for true integration.
Meanwhile, I see no reason that you can't continue to use DDfIC to pay anyone you want. You just need a Tax ID from them and to tick the little box that says they are a 1099 contractor. Then, when it comes time to send your 1099s, just deselect the corporations and save yourself some forms and postage.
I raised this point with the rep I spoke with today and her biggest concern seemed to be that the IRS might be upset with me for using DDfIC to pay a corporation and not sending a 1099. But the IRS doesn't require me to send a 1099 to a corporation and I'm pretty damn certain this change in name and policy is about making more money for BillPay than anything the IRS says.