Whether it's a Series A, a bank line or a due-diligence data room, the bar is the same. Here's what clears it.
The four pillars
- GAAP-compliant — accrual basis, revenue recognized per ASC 606, expenses matched to periods
- Reconciled — every bank, card and loan account tied out to statements, every month, with no mystery balances
- Documented — contracts, invoices and support filed so any number traces back to evidence
- Controlled — clear separation between recording and approving, even in a small team
Where founders lose points
- Personal and business spending mixed in one account
- Revenue recognized on cash receipt instead of delivery
- Balance-sheet accounts (accruals, deferred revenue, fixed assets) never reconciled
- No paper trail behind big or unusual entries
The bottom line
Clean, GAAP, reconciled, documented — every month. We build books to that standard so a data room is a download, not a fire drill.
Raising or selling soon?
We'll get your financials to GAAP audit-ready standard before anyone asks for the data room.
See US GAAP Advisory Get a free quoteIf your business pays US contractors, three obligations follow you all year.
1. Collect a W-9 before you pay
Get a signed W-9 from every US contractor before the first payment. It gives you their legal name and TIN — the two things you need at filing time. Chasing W-9s in January from contractors who've moved on is how deadlines get missed.
2. Issue 1099-NEC on time
You report nonemployee compensation on Form 1099-NEC once payments to a contractor cross the reporting threshold for the year (historically $600; recent legislation raises it for payments made after 2025 — check the current figure when you file). The form goes to the contractor and the IRS by January 31.
- Payments to corporations are generally exempt (attorneys excepted)
- Payments made by credit card or through platforms like PayPal business are reported by the processor on 1099-K instead — don't double-report
- Foreign contractors working outside the US get a W-8BEN, not a 1099
3. Make sure they're actually contractors
The IRS looks at behavioral control, financial control and the relationship. Set their hours, provide the tools, make them exclusive — and you may have an employee, with back payroll taxes and penalties to match. When in doubt, run the facts past a professional before the relationship hardens.
The bottom line
W-9 up front, 1099-NEC by January 31, and honest classification. MOREOFTAX handles contractor reporting, payroll setup and classification reviews as part of bookkeeping and tax plans.
Contractor reporting handled for you
W-9 collection, January 1099 filings and classification checks — bundled into our bookkeeping plans.
See Bookkeeping Get a free quoteGet guides like this in your inbox
One practical US tax guide a week. No spam, unsubscribe anytime.
Related guides
Estimated Quarterly Taxes: A Practical Guide
Who pays quarterly, how to calculate safe-harbor amounts, and the dates that matter.
Read the guide →
1099-K Threshold Changes: What Sellers Must Know
What platforms report about you now, and how to keep your books ahead of it.
Read the guide →
Monthly Bookkeeping: Why It Matters
Clean monthly books are the difference between filing season and filing panic.
Read the guide →
