Vendor Setup and Maintenance Checklist

Use the legal name on the W-9 line 1, not the DBA. Mismatches between the AP master and the TIN of record are the top reason 1099-NECs get rejected by the IRS in the January B-Notice cycle.

Capture the AR contact name, email, and phone separately from the sales rep. The AR contact is who you call about a missing invoice or a misapplied payment; the sales rep usually cannot help.

Pull from W-9 box 3: sole proprietor / single-member LLC, C-corp, S-corp, partnership, trust/estate, or other LLC. This drives 1099 reporting — payments to C-corps and S-corps are generally exempt, but legal services and medical payments are reportable regardless of entity type.

Request the current-revision W-9 (most recent IRS revision date). Do not accept a typed or photo-copied signature without a date — unsigned W-9s do not satisfy the solicitation requirement and leave you exposed to backup withholding penalties.

W-8BEN for individuals; W-8BEN-E for entities. If the vendor claims a treaty rate, confirm the treaty article and that a foreign TIN is provided. Without a valid W-8, default 30% withholding applies to US-source income.

Use the IRS e-Services TIN Matching program or your AP platform's built-in match (Bill.com, Ramp, Avalara 1099). A mismatched name/TIN combination triggers a CP2100 B-Notice and 24% backup withholding on subsequent payments.

Flag the vendor record for 24% federal backup withholding and send a B-Notice (first or second notice, per CP2100 procedures) requesting a corrected W-9. Do not release the next payment until the corrected TIN clears a re-match.

Apply the standard test: payments for services to a non-corporate vendor at $600+ annually are 1099-NEC reportable. Carve-outs: legal fees to attorneys are reportable regardless of entity (1099-NEC box 1); medical and healthcare payments to corporations are reportable (1099-MISC box 6); payments for goods are not reportable.

In QuickBooks Online, Xero, Sage Intacct, or NetSuite, toggle the vendor's Track for 1099 flag and map the default expense account to the correct 1099 box. Wrong box mapping is the #1 reason January 1099 runs require manual cleanup.

ACH is preferred for domestic recurring vendors; wire for high-value or international; check only when the vendor cannot accept electronic. Avoid Zelle and Venmo for B2B — they bypass AP controls and complicate 1099-K reconciliation.

Collect routing number, account number, and account type (checking/savings) on the vendor's letterhead or a voided check — never just an email body. Wire instructions need the SWIFT/BIC and intermediary bank if applicable.

Call the vendor at a phone number from your existing records — not the number on the new banking form. Business email compromise (BEC) wire fraud almost always uses a spoofed change-of-banking email; the callback control catches it. Document the name spoken to, date, and time.

Standard is Net 30; capture any negotiated terms (Net 15, Net 45, 2/10 Net 30). Code the discount terms into the AP system so Bill.com or Ramp can auto-flag invoices eligible for the early-pay discount before the discount window closes.

Required for vendors performing on-site work, professional services with E&O exposure, or anything contractually obligated. Verify general liability limits, additional-insured endorsement naming your entity, and the policy expiration — set a calendar reminder 30 days before lapse.

Run the legal entity name and any beneficial owners against the OFAC Specially Designated Nationals list and the SAM.gov debarment list. A hit blocks payment entirely; document the screening date and screenshot.

If your firm is the engagement auditor or reviewer for this vendor or a related party, flag for partner review before setup. AICPA independence rules prohibit certain financial relationships with attest clients; the AP record itself can be the trigger.

Populate all required fields in QuickBooks, Xero, Sage Intacct, or NetSuite: legal name, DBA, TIN, address, terms, default expense account, 1099 flag, payment method. Attach the W-9 and COI to the vendor record so they travel with the file under future audit.

Pick the GL account that matches the goods or services this vendor provides — not a generic suspense account. Add class, location, or department dimensions where the COA uses them so the default coding doesn't dump every bill into the wrong P&L bucket.

Set approval thresholds in Bill.com, Ramp, or Stampli — typically dual approval above $5K, controller approval above $25K, CFO above $100K. Assign the budget owner as first approver based on the default expense account.

Controller or AP manager reviews the completed record against the W-9, COI, and banking verification before activating the vendor for payment. Segregation of duties: the person who entered the record cannot also approve it.

The IRS treats a W-9 as valid until circumstances change, but a three-year refresh cycle catches entity-type changes (LLC to S-corp election, sole prop to LLC) that would otherwise silently misclassify 1099 reporting.

Pull a COI expiration report monthly. Request the renewal certificate 30 days before lapse. A vendor working on-site without active coverage exposes the firm to vicarious liability if something happens.

Pull a vendor master report and review for duplicates (same TIN, different names), inactive vendors with zero activity over 12 months, and missing W-9s on 1099-flagged vendors. Inactivate stale records; duplicates are a known fraud vector.