What is a Payee?
In accounting, a payee (also commonly referred to as a vendor) is any individual or business that your law firm pays money to in exchange for goods or services. Payees are a fundamental part of managing your firm's operating expenses — you cannot accurately track and report on what your firm spends without knowing who it was spent with.
Common examples of payees in a law firm include:
Office supply and equipment vendors
Software and technology service providers (e.g., case management, billing, research tools)
Landlords and property management companies
Utilities and telecommunications providers
Marketing and advertising agencies
Professional service providers (accountants, consultants, IT support)
Freelancers and independent contractors — especially those who may require a 1099 at year-end
Court reporters, expert witnesses, and other litigation vendors
Properly maintaining your payee list ensures that operating expenses are attributed to the right parties in your books, supports accurate financial reporting, and makes year-end tax preparation — including 1099 filing — significantly easier.
How Payees Work in PracticePanther
Unlike some standalone accounting platforms that manage vendors in a separate module, PracticePanther treats payees as contacts. This means your vendors live in the same Contacts section of PracticePanther as your clients — they are simply contacts with a special set of payee-specific settings enabled.
This approach has several advantages:
Payees can be selected anywhere a contact is referenced across PracticePanther — in payments, expenses, journal entries, and reports
You manage all your business relationships (clients, opposing parties, vendors) in one place
Payees are searchable and filterable using the same tools available for all other contacts, including tags
Important for PantherAccounting Plus onboarding: If your firm is setting up PantherAccounting Plus for the first time, you will need to create contacts in PracticePanther for each of your existing payees before you can use them in your accounting workflows, such as firm payments.
Creating a Payee Contact
To create a new payee in PracticePanther:
From the white New button, click Contact
Enter the payee's name. For businesses, use the Add a Company option, for individuals, use the First / Last Name fields
Add any relevant contact details such as address, phone number, email, and website
Scroll down to the Payee Settings section
1099 Eligible - This setting indicates whether this payee should be tracked for IRS 1099 reporting purposes. In the United States, law firms are generally required to file a Form 1099-NEC for any independent contractor or unincorporated service provider to whom they paid $2,000 or more during the tax year ($2,000 for 2026, $600 for previous years).
Setting this to Yes for the relevant payees ensures your firm can accurately identify and report 1099-eligible payments at year-end. This is particularly important for:
Freelancers and independent contractors
Court reporters and process servers
Expert witnesses
Sole proprietors providing services to the firm
Corporations and most LLCs are generally not required to receive a 1099, so you would leave this set to No for those payees. When in doubt, consult your accountant.
Tax Id - This field stores the payee's taxpayer identification number — either an EIN (Employer Identification Number) for businesses or an individual's SSN or ITIN. This information is required to complete a 1099 form and should be collected from 1099-eligible vendors before any payments are made.
Add a payee tag in the Tags field (recommended — see the tagging section below)
Click Save
Using Tags to Identify Payees
Because payees share the Contacts section with clients and other contact types, we strongly recommend creating a "payee" tag and applying it to every vendor contact. This simple step makes it significantly easier to find, filter, and work with your payee list throughout PracticePanther.
Creating and Applying the Payee Tag
When creating or editing a payee contact, click into the Tags field
Type payee and select Add new tag: payee if it doesn't already exist, or select it from the list if it has been created previously
Once the tag is created, it will be available to apply to any contact going forward. You only need to create the tag once — all subsequent payee contacts can simply select it from the tag dropdown.
Filtering by the Payee Tag
Once your payee contacts are tagged, you can filter on the "payee" tag throughout PracticePanther wherever a tag filter is available, including:
Contacts list — Filter to view only your payee contacts at a glance
Payments — Filter payment records by payee tag to review all outgoing payments to vendors
Expenses — Filter expense entries by payee tag to review vendor-related costs
Reports — Use the payee tag in saved reports to build custom vendor expense summaries
Where Payees Appear in PantherAccounting Plus
Once your payee contacts are set up in PracticePanther, they are available throughout PantherAccounting Plus wherever a payee needs to be selected:
Firm Payments — When recording an outgoing payment (e.g., paying an expense or issuing a check), you select the payee from your contact list
Journal Entries — Payees can be referenced when creating manual journal entries
Custom Operating Report — The Custom Operating Report allows you to filter transactions by a specific payee contact, making it easy to pull a full expense history for any vendor.
Check Printing — When printing checks from PantherAccounting Plus, the payee's name and address are pulled from their contact record
Best Practices for Payee Setup
Set up your payee list as part of your onboarding. Once onboarded, compile a complete list of your firm's active vendors and create a contact record for each one. Your accounting workflows will be smoother when your payee contacts are already in place.
Collect W-9s upfront. Before making any payment to a new contractor or service provider, request a W-9. Add their Tax ID to the Payee Settings immediately so it's on file when you need it at year-end.
Mark 1099-eligible vendors before their first payment. It is much easier to flag vendors as 1099-eligible when you set them up than to retroactively identify them later. Review your vendor list at the start of each year and confirm 1099 eligibility for all active payees.
Use the payee tag consistently. Apply the "payee" tag to every vendor contact as you create them. Consistency now saves time when you need to filter or report on vendors later.
Keep Tax IDs up to date. If a vendor's Tax ID changes (e.g., they restructure their business), update their contact record promptly to avoid issues with year-end 1099 preparation.