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Resources

Compliance

Onboarding New Vendors - The Consequences
of Doing It Wrong

Onboarding a new vendor is typically a pretty easy process. You request the name and address of the vendor, Social Security Number (SSN) or Employer Identification Number (EIN) and you are done. But not so quick! The way in which you request certain information about a vendor may not be compliant with IRS requirements. The most important part to the onboarding process is to correctly identify the vendor. Is this a U.S. person or a foreign person? What information do you need to request? How do you make that determination?

 

Who Is Responsible for Validating Vendors and Ensuring Compliance?

In the November Issue of AP Customer Service Advisor, InvoiceInfo invited readers to share their thoughts on who should be responsible for onboarding new vendors and ensuring compliance with federal and state regulations. Following are some suggestions received:

 

When Should Vendor Onboarding Begin?

The time to start thinking about compliance with federal regulations, such as Information Reporting (1099s) and checking vendors against databases, such as the Office of Foreign Assets Control (OFAC), Specially Designated Nationals (SDN) and other sanctions lists, is before the vendor has provided a product or service, not once the invoice has been received and is being paid by accounts payable.

 

Are You Checking OFAC and SDN Lists Before Transacting Business with Your Vendors?

The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals, threats to national security, foreign policy or the economy of the United States. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope and involve close cooperation with allied governments.

 

Compliance and Vendor Onboarding:
What You Don't Verify Can Hurt/Cost You

Last month we reviewed the importance of getting vendors onboarded with the correct information the first time. Errors in vendor information increase both cost and risk. This month we’ll turn our focus to verification and compliance issues associated with onboarding vendors.