Mid-January has your accounting team overwhelmed with spreadsheets. They are manually checking vendor payments and 1099 amounts. All while racing against IRS deadlines. One missed vendor or miscalculated amount could mean penalties, angry phone calls, and hours of cleanup work.
This year-end scramble has been the reality for many Business Central users until now.
Microsoft Dynamics 365 Business Central now includes a redesigned 1099 framework that brings the entire process into the system. While early versions had challenges that frustrated adopters, Microsoft has resolved these issues. Microsoft recently released Business Central version 27.x (2025 Release Wave 2). It improves the 1099 functionality to make it stable, accurate, and ready for production use.
We work closely with finance and accounting teams to implement and support Business Central in operating environments. The purpose of this blog is to explain how the new 1099 feature works. It also discusses why it is important and how businesses can benefit from it.
As a bonus, we also provide step-by-step configuration and submission instructions. The Business Central 1099 Setup, Generation, and Submission Guide provides comprehensive guidance throughout the entire process. It covers everything from planning to submitting to the IRS.
The developers built the new 1099 functionality in Business Central around a document-based workflow. The design aims to improve visibility, control, and auditability throughout the year, not just at filing time.
Instead of using a simple "1099 vendor" designation, vendors are configured by IRS reporting period. Each is then assigned the appropriate 1099 form type (such as MISC or NEC) and box number.
The vendor card maintains Federal ID numbers from W-9s and electronic delivery consent. Business Central also supports bulk vendor setup by reporting period, which significantly reduces year-end cleanup.
Once vendors are configured, Business Central automatically calculates 1099 amounts from posted and paid purchase transactions. Amounts are tracked at the document level. Accounting teams can clearly see how they calculate totals and where they may need to make changes.
IRS reporting periods define the tax year and ensure transactions are captured correctly. You can create them manually or copy them forward from prior years. This process allows teams to prepare early and avoid missing data.
Before filing, accounting teams can review calculated 1099 amounts. They can make corrections using vendor ledger entries or 1099 adjustment tools. This flexibility allows teams to handle exceptions while maintaining a clean audit trail.
1099s are generated as IRS 1099 Form Documents, which move through a clear lifecycle: open, released, and submitted. Business Central version 27 includes direct integration with the IRS IRIS system, allowing electronic filing without leaving the application. Test submissions and correction workflows are fully supported.
After submission, you can email 1099 copies to vendors who have provided electronic consent. You can also print them using IRS-compliant substitute forms. Pre-printed IRS forms are no longer required.
The biggest value of the new 1099 functionality is not just compliance: it is control. Based upon our client experience, this significantly improves how accounting teams handle year-end reporting.
Less manual work: Eliminate spreadsheets and duplicate data entry
The new 1099 feature in Microsoft Dynamics 365 Business Central gives accounting teams what they need. It offers a reliable solution that works within Business Central, a system they already use. With the early issues resolved, this is a feature businesses can now confidently adopt.
To support successful implementation, we have created a comprehensive Business Central 1099 Setup, Generation, and Submission Guide. It provides detailed, step-by-step technical instructions covering:
Get instant access to the full technical guide with screenshots, configuration examples, and best practices.
Download the Business Central 1099 Setup, Generation, and Submission Guide (PDF)
Our team of Business Central experts is available to help clients set up and check the new 1099 feature. This way, your system will be ready before filing deadlines.
Contact 425 Consulting to work with a team that knows Business Central. They understand the real-world needs of accounting and compliance.
Spencer Kriz is a Functional Consultant at 425 Consulting Group where he leverages his Microsoft certification and course management expertise to design, implement, and support Microsoft Dynamics 365 Business Central solutions. Additionally, he is responsible for developing training videos that support our client’s ongoing success.
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