Vendor Onboarding Checklist
| Checkbox | Item | Purpose |
|---|---|---|
| ❏ | Educate Vendors on Working with Your Company — start your relationship with your vendors on the right footing — set their expectations early on by educating them on your terms, processes and procedures | Enhance relationship |
| ❏ | Welcome Package — provide vendors with welcome package with instructions for invoice processing, completing vendor information form, W-8 or W-9 forms, payment terms, pricing and discounts, returns and account credits process | Eliminate errors, missing information and exception items; adhere to policies |
| ❏ | New Vendor Information Form — have vendor complete vendor information form to collect pertinent information about vendor, such as name, address, phone number, email, EIN, bank details, demographic information, etc. This can include items below such as tax and banking information. | Eliminate errors, missing information and exception items; adhere to policies |
| ❏ | Collect Required Documentation — collect necessary licenses, insurance, certifications and other documentation from vendors | Enforce policies, eliminate missing information |
| ❏ | Collect Bank Account Information — for EFT/ACH payment, including account ownership, account and routing numbers | Prepare for electronic payment |
| ❏ | Bank Account Verification — verify the information on the bank account form: ownership, account and routing numbers See Stop Fraud Before It Starts: Bank Account Verification Practices and Best Practices for Bank Account Verification | Guard against payment errors and fraud |
| ❏ | Gather Supplier Contact Information and Their Roles — get to know your suppliers | Enhance relationship and guard against fraud |
| ❏ | Tax Classification — determine whether new vendor is a self-proprietor, partnership, C corporation, S corporation, trust or estate | Ensure accuracy for filing 1099MISC, 1099NEC and 1042-S forms, eliminate fines and penalties |
| ❏ | Taxpayer Identification Number Validation — compare new vendor TIN and address provided on W-9 with IRS records to ensure accuracy when filing 1099s | Ensure accuracy for filing 1099MISC, 1099NEC and 1042-S forms, eliminate fines and penalties, reduce audit exposure and time in audit |
| ❏ | Withholding and 1099/1042 Planning — determine whether backup withholding is required; determine if new vendor will require a 1099, 1042 and document | Eliminate fines and penalties, reduce audit exposure and time in audit |
| ❏ | OFAC/SDN/Other Verifications — check government sanctions and watch lists to ensure it is legal to do business with the vendor | Eliminate fines and penalties, reduce audit exposure and time in audit |
| ❏ | Securely Store Vendor Information Forms, W-8s and W-9s and Other Documentation — ensure forms are available when you need to access them | Protect from fraud and cyber risk |
| ❏ | Maintain Notes on New Vendor Processing — keep notes on each vendor in case of an audit | Eliminate fines and penalties, reduce audit exposure and time in audit |
| ❏ | Train Suppliers on Invoice Inquiries and Other Communication Protocols — let vendors know upfront how to communicate with your organization if they have questions about invoice receipt and payment | Enhance Relationship |
Vendor Data Update Checklist
Here is a checklist to use when you receive vendor communication requesting you to update vendor’s information. It is vital to confirm the request independently from the initial contact from the vendor. Use information in your record to contact the vendor–do not use contact information included in the data change request.
| Checkbox | Item | Purpose |
|---|---|---|
| ❏ | Confirmation — Call back the vendor independently to confirm the update; use the contact information on record, not the contact information contained in the request, whether email, phone or letter. | Validation and protection again fraud |
| ❏ | Request the Vendor Name and Number | For confirmation and update |
| ❏ | Request and collect the Vendor Address | For update |
| ❏ | Request and collect Vendor’s Prior and Current Financial Institutions | For confirmation |
| ❏ | Request and collect information on 3 current invoices: invoice numbers, amounts, dates and TIN | To assist in vendor validation (Note: To protect your organization from fraud, this must be independent of the vendor email request) |
| ❏ | Conduct bank account verification. While a manual process is tedious, it is absolutely necessary. (Automated BAV eliminates the time and tedium.) | To ensure correct payment and avoid fraud |
Necessary Vendor Information
The following is a list of key data items to collect when onboarding a new vendor.
| ❏ | Vendor name |
| ❏ | Business name if different (DBA) |
| ❏ | Parent/subsidiary relationship(s) |
| ❏ | Ownership, principal owner |
| ❏ | Address: street, city, state, zip, country |
| ❏ | Address: post office box |
| ❏ | Phone |
| ❏ | Fax |
| ❏ | Email Address |
| ❏ | Website URL |
| ❏ | DUNS Number |
| ❏ | Commodity or Industry Code |
| ❏ | GL Number(s) |
| ❏ | Contact Person |
| ❏ | Contact phone – office / cell |
| ❏ | Purchase order address |
| ❏ | Accounts receivable contact information |
| ❏ | Remittance address |
| ❏ | Limits & restrictions (minimum/maximum) |
| ❏ | Payment type |
| ❏ | Payment currency |
| ❏ | Bank Account Information (see below) |
| ❏ | Payment Terms (including discount terms/dates) |
| ❏ | Freight Terms |
| ❏ | Tax ID Number (FEIN, SSN, ITIN) |
| ❏ | Tax Classification (Corporation, Partnership, Sole Proprietor) |
| ❏ | Special Business Status/Diversity Classification (MBE, WBE, etc.) |
| ❏ | Special Business Status Certificate |
| ❏ | Critical Supplier Designation |
| ❏ | Other Custom Designator (e.g. ESG rating) |
| ❏ | Sales tax status designation |
| ❏ | License |
| ❏ | Certification |
| ❏ | Insurance document |
For Existing Vendor Information Changes
For existing vendors with changes to their information, you need to gather the following.
| ❏ | Changing bank info – request 2 or 3 recent invoice numbers with date and amount (also Data Requirements for Bank Account Verification below) |
| ❏ | Changing address info – request current and new address |
| ❏ | Changing remittance address – request current and new address |
| ❏ | Changing A/R contact info – request current and new information |
| ❏ | Changing company name – request current and new name – suggest requiring a whole new vendor setup |
| ❏ | Changing TIN – require a whole new vendor setup |
| ❏ | Changing payment type – request current type and new type – collect other info as necessary for the new payment type |
Data Requirements for Bank Account Verification (New and Updated)
Bank account verification has become crucial. To verify U.S. bank accounts, you need to collect the following data.
| ❏ | Bank name |
| ❏ | Routing number |
| ❏ | Account number |
| ❏ | Account Type: Commercial or Individual |
| ❏ | TIN based on above , EIN or SSN. |
| ❏ | Account owner |
| ❏ | Full address registered on the account (usually NOT a PO Box) |
If you are doing manual bank account verification, you need to collect official bank documentation, such as a bank letter or voided check, in your validation process.
To verify international bank accounts, requirements vary by country. You need to collect the following data (and documents such as a bank letter or voided check).
| ❏ | Country of company registration |
| ❏ | Account Type: Commercial or Individual |
| ❏ | Account address |
| ❏ | Account country |
| ❏ | ACH/Wire contact name |
| ❏ | ACH/Wire contact phone |
| ❏ | Name on the account |
| ❏ | TaxID/VAT#/OtherID |
| ❏ | IBAN |
| ❏ | Swift code |
| ❏ | Bank code |
| ❏ | Branch code |
| ❏ | Account number |
| ❏ | Account country |
| ❏ | Account currency |
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