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:
“I believe onboarding should be done at the purchasing level. The purchasing party always knows ahead what contracts are coming down the pipe. They know prior to even an invitation to bid goes out.
I have been trying to get our purchasing department to have vendors sign a new W-9 at the time the contract is awarded, as part of their contract package they must review and sign — PRIOR to work commencing — I haven’t been that successful, but some buyers remember to do so.”
Jane Swanson, Orange County Transportation Authority
“Our process is a centralized vendor master with a dedicated staff member having ownership. This works extremely well for us as that person has the responsibility for onboarding and is accountable for accurately maintaining the database. They take pride in making sure all documents are correct and good. We have a Vendor onboarding packet that is sent to all new vendors with a note stating they will not be paid until they complete and return the documents. Our packet includes a W-9, minority questionnaire, tax exemption form (we are non-profit), Independent Contractor Master Contract forms if applicable, ACH form and an instruction/introduction on our payment process with contact info.
We use a web-based service to check all government and state databases and directly do TIN matching with the IRS before the vendor is set up. We do this at set up and test the entire vendor master quarterly. Any vendor that does not supply a good W-9 or refuses is contacted and told that we will not be processing payment until we get a good W-9 or we can withhold tax. We usually get a good W-9 quickly — they want their money.
Our software’s vendor master is robust and allows us to upload scanned copies of any documents to the vendor’s master record. We have the capability to assign attributes to each vendor indicating status, compliance, type and other information which can be filtered upon to generate specific reports as needed on vendor usage.
The Vendor Master file/database is the most important part of any AP system and I am very happy I have a good one.”
Lou Niggel, Resources For Human Development
“At our company if it is an inventory supplier we have a form within the company that the head managers have to sign off on plus after that we go through a risk assessment to make sure they are not on a black list or such and we also get a copy of their W-9.
This is necessary as part of our ISO certification process. We follow these procedures so we are purchasing from a valid vendor and we retain these documents for audit purposes as well.
I think it is a thorough and smart plan.”
Lisa Furtado, Dichtomatik Americas
“We at Boar’s Head have a process of layered approval before a vendor can be used. Procurement reviews a submitted, manager approved, internal form giving the vendor’s information and reason for using. Finance (AP) verifies the W-9 information using a TIN matching program. If a vendor does not submit a W-9 (or W-8) or the W-9 can’t be verified, then the vendor is rejected. If anyone in the organization submits an order to (does business with) a new vendor before all approvals are in place they lose their buying privileges.”
Dorothy Triolo, Boar's Head Brand
Thanks to our readers for sharing their onboarding processes with us!