We have a company, affiliate programs have a company. We provide them a service of marketing their products through their affiliate program. Yet not one affiliate program has ever asked us to send them an invoice for the service we provided in order to pay us. And we've worked with over 400 of them. How do they justify the payment as a tax deductible expense without our invoices? Do they treat all affiliates as natural persons (who don't need to issue invoices) and therefore disregard the fact that we are actually a company they should get an invoice from? Where's the catch?
I have also asked myself this question. Maybe they do something like Commission Junction -- it get so called self billing invoice from them every month.
I guess the vast majority here are either natural persons without companies or no one cares about proper accounting.
It's unnecessary for us to worry about how they do their own tax-deductible business expensing is why no one has answered, likely. So long as I'm in the clear and the affiliate company is legitimate, I couldn't care a whole lot less how they do their expenses.
True, the whole question that raised my eyebrows is just how come they don't ask for invoices to be issued to them. Usually before you pay a company you want their invoice which you can later use in your accounting. What I have learned is that they do issue invoices for outgoing payments themselves and they therefore don't need ours. I guess it depends on how strict a particular tax jurisdiction is. In our jurisdiction tax auditor/inspector wants to see the invoice issued to us for all the payments we made. Even more, some would like to see them signed. Tho that just shows they don't get the whole internet commerce and electronic invoices.