Paying vendors safely: onboarding, approvals, payment runs, checks, and wires

Collect a W-9 from any vendor you might need to report, confirm the legal name and tax ID, and record the payment details. Verify bank details by calling a number you already have, not one from an email. Have someone other than the person who pays bills approve a new vendor.

Doing this at the start prevents the two common cleanups: scrambling for W-9s in January, and finding payments sent to a lookalike vendor.

Set a limit above which a second person approves a payment. A budget owner can approve smaller bills, and the owner or finance lead approves the rest. An expense policy that says what the company pays for, what needs a receipt, and who approves what lets employees spend without asking each time, and keeps surprises small.

Pay on a schedule, such as weekly. Prepare the batch, have the approver review it against the bills, then release it. After the bank confirms, reconcile the batch total to the bank withdrawal so you know every payment that left was approved.

To stop duplicate payments, check each bill number and amount for the same vendor before paying. Software can flag likely duplicates, and a monthly review of payments to the same vendor for the same amount catches the rest.

If you still write checks, keep the stock locked, require a signer who is not the person who prepared the check, and record each check by number. Review the bank statement for checks that cleared that you did not issue, and follow up on checks that remain outstanding for months.

Wires are fast and hard to reverse. Before sending a large wire, confirm the instructions by phone with a known contact, require two people to release it, and be especially cautious about urgent requests to change an account. Business email compromise, where a fraudster impersonates a vendor or executive to redirect a payment, is a common scheme.

If you keep a small cash fund, put one person in charge, record every withdrawal with a receipt, and count it against the authorized amount regularly. Close the fund if you rarely need it.