Let say we have a partner (affiliate) program, and every month we want to send payouts to our registered partners based on a shared revenue. We are based in the USA, and our partners can be in the US or anywhere in the world. How should we distribute those payouts? Should we send 1099 to the US ones? What about the rest of the world ones? Do we need to receive an invoice from the affiliates before we send payment?
1) Payment distribution. Use a system like Post Affiliate Pro or similar, which allows you to export a .csv file compatible with PayPall "Mass Pay".
"Mass Pay" cost $1/batch to process, so your Affiliates won't be charge normal PayPal fees.
2) You must send 1099 Misc forms to all people you pay more than $600/year. Failure to comply... well... Like the bootleggers in Oklahoma (where I grew up) use to say...
"Don't mess with the revenuers."
I suggest anyone with a US address, you require a SS or EIN number. Period. Do this during their signup process.
You'll thank me for this tip, as it's like pulling teeth to get this info at some future date.
Here's another trick. Defer asking for SS or EIN number till the first scheduled payment to each US affiliate. Then send an email saying payment will be issued when SS or EIN has been provided.
3) Don't ever wait for an affiliate to invoice you for their payment. This will create a mass of nonsense work for you + all your affiliates, which will rapidly sour your affiliate relations.
4) Sounds to me like you're new to affiliate payments.
You're welcome to schedule a call with me for information about how to select + hire an affiliate manager.
After you provide me with details about your business, my guess is I can recommend one of several affiliate managers which might take on your project, if their schedule permits.