A Wizard to Help You Help Vendors Help You! Getting a tax ID from new vendors is an important part of vendor onboarding. Best practice is to get it up front. And the best way for the vendor to provide its tax ID and tax classification is to complete and submit it to you on an IRS form with the requisite information, namely IRS form W-9. Or is it the 8233? Or W-8BEN, or the W-8BEN-E? Or maybe the W-8ECI, … EXP, … or IMY? Oh my! It’s not surprising that your new vendor might not know which form to fill out for you. For that matter, do you know which form is the correct one? If the vendor is a U.S. entity subject to payment reporting, you probably know they should submit a W-9. But if the vendor is a non-resident alien, should they complete a W-8BEN or an 8233, for example? (You are clear on the uses of each, right?) And what if they are a foreign vendor? How likely are they to know what form to use? Do you know which form they should use? (Have you ever had to send back the form they provided because it was the wrong...

27 February, 2018

A new survey conducted jointly by InvoiceInfo and IRSCompliance reveals what companies are doing in their vendor onboarding process and how they’re doing it. The good news is that a majority are doing at least some of the right things. Fewer, however, are doing those things right, or at least in the most efficient and error-reducing ways. InvoiceInfo will be releasing the survey soon, but here are a few results highlighting some key responsibilities of vendor onboarding and methods. In most instances, a vendor must be added to the vendor master file in order to get paid. But consider what that also means: once in the master file, a vendor can be paid! Checks can be written or electronic payments issued to that vendor. Adding a new vendor to the master file is therefore consequential. With this in mind, there is some positive news in the survey. A majority of organizations – 54 percent – require multiple levels of approval for onboarding new vendors. Further, 63 percent of survey respondents validate new vendors prior to purchasing from them. Still, that means more than a third are purchasing before validating, though perhaps not necessarily paying. The news is a bit better on the tax front: 91...

09 February, 2018

If your accounts payable department wants a motto, it might go with Semper Vigilo — "always vigilant." Threats to businesses abound and given that accounts payable issues payments, it is a prime target for criminal perpetrators of all kinds. In addition to prevention of myriad fraud schemes, AP must also ensure information protection as well as avoid unwitting payments to sanctioned entities. This, of course, involves compliance with the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC). OFAC keeps track of and enforces U.S. sanctions on countries, entities, and persons — including drug traffickers, WMD dealers, dirty diamond traders, organized crime syndicates and, of course, terrorist organizations. Sanctions aim to enforce U.S. policy, prevent criminal activity and combat terrorism. (It’s a real thing — see one shared services director’s story in Avoiding the Men in Black.) You’re familiar. And you’re compliant, right? Or do you just think you are? How are you managing your compliance? It’s not enough to run your list against OFAC’s SDN list once in a while, or even (you thought of this) to check your new vendors against the list. Of course, you are adding new vendors all the time. Those need to be checked and you’re doing...

29 January, 2018

The New Year has begun. And as generally happens this time of year in the northern hemisphere, it’s cold. Along with the cold comes colds and flu (apparently worse this year than usual). Winter weather and the cold-and-flu season can mean snow days or sick days — lost time just as the year gets rolling. And AP’s time is precious! Suppose you could save time? Suppose you could make better use of your time? There’s at least one way you can. You know that the once-heralded notion that productive people are good at multi-tasking is beyond suspect. Research is finding not only does doing multiple things at once slow you down, it lowers your IQ and possibly your EQ (emotional intelligence quotient)! And while the resulting mental impairment was thought to be temporary, according to Travis Bradberry, author of Emotional Intelligence 2.0, new research suggests the damage may not be temporary! [1] Yikes! By the way, it’s not new knowledge that multi-tasking is inefficient. More than 2,000 years ago Publilius Syrius said, “To do two things at once is to do neither.” We work better and smarter when we focus on one thing at a time. In accounts payable, there are a lot of tasks...

12 January, 2018

It’s December – the season of lights, the season of giving. That sometimes means gifts from suppliers who want to say, “Thanks for your business.” But suppose the circumstances were switched? Suppose the tradition was for accounts payable to give gifts to suppliers? What kind of gift might suppliers appreciate? Well, imagine a credit and collections group in their last meeting of the year. They’re just wrapping up when one of them says, “Hey, do any of you send gifts to your customers in December?” A few comments are made in the affirmative and the negative when a supplier named Ted speaks up: “I know what gift I’d like to receive from our customers. To be paid faster throughout the next year!” “Ha!” says Harry with a roll of his eyes. “Who wouldn’t?” A third supplier, Elaine, warming to the idea of receiving a gift as well as giving one, observes: “Well, what we’d really like is an easier and faster way to find out if the customer got our invoice, and when we will be getting paid. You know – self-service. A way that avoids our having to call and leave messages, or send emails and not know if they got them...

12 December, 2017

Details of Vendor Information Collection and Validation As she crossed the company parking lot early one morning, the director of shared services saw them. Men in black. Two of them. As she neared the building entrance, they approached and addressed her by name. She was afraid this day would come, and it finally had. They flashed their federal credentials, and she welcomed them up to her office. They were there to talk about a payment she had authorized. As it turned out, the payee was on a sanctions list of the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department, and the SSC director and her company were in trouble. This really happened. So maybe you’ve heard of OFAC’s sanctions lists? The U.S. government has lists of individuals, organizations, and countries with whom it is illegal to do business, including narcotics traffickers, diamond smugglers, rogue regimes, terrorist organizations, et cetera. Various lists are aggregated and published, and transactions monitored by OFAC. If you run afoul of the list, it’s going to cost you. Banks, in their compliance, effectively screen payments for the government. They’ll find out if you slip. So what are you doing about it? Are you screening your supplier...

30 November, 2017

It’s November. Do you know where your W-9's and W-8's are? It is time to prepare for 1099 season. Hopefully, you know which of your suppliers are subject to reporting. Do you have verified tax identification numbers for them all? Remember that 1099's with Box 7 nonemployee compensation reporting are due January 31st! Furthermore, the automatic 30-day extension is gone this reporting season so don’t count on easily getting extra time to complete your 1099's. Ideally, you have implemented best practices that entail getting the requisite W-9 or W-8 prior to adding a new supplier to the vendor master file. If not, you at least require the supplier to submit the appropriate W form — or at the very least give you their tax ID number — before you issue them payment, right? Otherwise, you must withhold taxes from the payments. If you fail to withhold, it is going to cost you. The IRS has increased penalties in recent years and failing to comply with requirements has gotten expensive! With reporting around the corner, it’s high time to determine if you are missing any supplier TINs and get them, and — to avoid B-notices — run them through IRS TIN matching for verification. If...

14 November, 2017

If you do not have a portal to enable self-service by your vendors, you should. Why? Vendor self-service is valuable in regard to supplier relations as well as in accounts payables’ cost to provide customer service to both your internal and external customers. Consider the following three ways vendor self-service is important. First, in what Forrester has dubbed the age of the customer, your customers expect it. That is, they expect ease in doing business — and this includes AP’s customers. The digital revolution has changed the way people transact and interact. The assumption is that information is readily available and easy to get. This notion is reinforced by daily experiences from shopping to banking from our mobile devices. Those consumer experiences bleed over into business expectations: “If I can handle all my personal accounts easily myself, why can’t I handle our business accounts that way?” What’s more, while technology has been revolutionizing the way things are done, generational demographics have been shifting as well, accelerating certain expectations in the workforce. According to Pew Research, in 2015 Millennials are now the largest generation in the work force, with 53.5 million, versus the Gen-Xer’s 52.7 million, and the Baby boomers’ 44.6 million. The generation...

01 November, 2017

In any organization, accounts payable touches a wide range of stakeholders, and therefore has a tremendous though often under-recognized impact. The various stakeholders are AP’s “customers” and AP’s service to them and how they perceive it are important. How so? The job of AP customer service is to respond appropriately to resolve a customer’s issue. But the job of AP customer service is not simply to answer a particular question. It is to find and solve underlying problems, build strong supplier relations, and maintain a great reputation on behalf of the organization. Some AP customer service calls are simply informational — when will we get paid? Others are more challenging but can lead to opportunities to improve your procure-to-pay process. Customer service calls can point to process breakdowns that need correction. Ideally, AP does not just solve the immediate concern but looks at the bigger picture, finds underlying causes and fixes them. This approach not only resolves one call but it eliminates further calls while strengthening the supplier relationship. But it’s hard to do when facing a heavy volume of contacts. AP customer service also impacts supplier relations, positively or negatively. In its customer service interactions, AP is the face of the organization...

17 October, 2017

Customer service is an increasingly consequential aspect of accounts payable. And according to a Financial Operations Network survey, most AP departments — 88 percent — rated their own customer service as either good or excellent. Good news? Not so fast. Only one in five had ever asked their internal customers and just one in ten actually surveyed their suppliers for feedback on their service. In any area of consequence it is important to know how well your team is actually performing. Sure, self-assessment is important and common performance metrics will be a major indicator. But there’s more to look at, and asking your customers how you are doing provides a “reality check” you won’t get otherwise! Areas to Measure (You May Be Part Way There Already) Metrics are a tool to help you understand where you stand currently and identify issues you need to address. Don’t think of them as “one more thing” you ought to be doing, but as a handy utensil to make it easier for you to do what you want to get done. Metrics will tell you where you are currently and help you identify and prioritize issues; they are useful in goal setting, and can be used...

05 October, 2017