What is a non-Service Vendor?

In Liquid, the default Vendor type is a Service Vendor. 

In addition, you can also use Liquid to work with non-Service Vendors.

In Liquid, you use Work Orders with Service Vendors and Purchase Orders with Non-service Vendors.

Service Vendors

According to the IRS, service vendors are "people such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors."

These are Vendors to whom you must file an IRS Form 1099-MISC for, such as: 

  • Services performed by someone who is not your employee (including parts and materials)
  • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
  • Payments to attorneys (including law firms or other providers of legal services)

As well as Vendors to whom you must file an IRS Form 1099-NEC for, such as:

  • Rents (Box 1)
  • Royalties (Box 2)
  • Other income (Box 3), including prizes and awards
  • Federal income tax withheld (Box 4), including backup withholding
  • Fishing boat proceeds (Box 5)
  • Medical and health care services (Box 6)
  • Substitute payments in lieu of dividends or interest (Box 8)
  • Crop insurance proceeds (Box 9)
  • Gross proceeds paid to an attorney, for example in a settlement agreement (Box 10, but payments to attorneys for services are reported on Form 1099-NEC)
  • Fish purchased for resale (Box 11)
  • Section 409A deferrals (Box 12)
  • Excess golden parachute payments (Box 13)
  • Nonqualified deferred compensation (Box 14)

Non-Service Vendors

Non-service Vendors are those that have provided you goods, supplies, or products, but do not do any service-oriented work for you. If your Vendor provides you goods and supplies but also provides services to you, they are considered a Service Vendor.

For example, if you are ordering supplies for your office bathrooms from a company but not janitorial services and do not need a contract to manage this relationship, you can classify this vendor as a Non-Service Vendor. Non-Service Vendors that are Corporations or LLCs taxed as Corporations will not create a W-9/W-8 with your company and you will not need to file the IRS form IRS-1099 for any payments received from you.

In Liquid, you use Purchase Orders with Non-service Vendors (and you use Work Orders with Service Vendors). Purchase Orders should only be used to keep track of goods, supplies, or products ordered from Non-Service Vendors. If these situations do not apply, you should consider the Vendor a Service Vendor instead.