US Based Entities - Explanations for Non-US Vendor Validations 

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In last week’s Blog Post entitled: “Table:  Non-US vs US Vendors for US Based Entities” I listed a table that showed the different forms, tax numbers as well as the different validations for the address, banking and watch lists.  Below you can find more detail about validations for Non-US Vendors for US Based Entities.  

IRS:  Legal Name and Tax ID 

Note:  Under certain scenarios for a foreign vendor that is an individual, the IRS could require a birthdate.  

 Disclaimer:   I am not a Tax professional.  W-8’s can be very complex, seek advice as needed from an Accounting and/or Tax professional.  

  • Reason to Validate:  Confirms that vendor is registered with the IRS and is not fraudulent and will not result in B-Notices from the IRS due to Legal Name and Tax ID mismatches.  

  • Required Document:  IRS W-8(X) 

  • How to Validate:   

 Other Tax Registration Numbers 

 VAT (Value Added Tax) 

 Office of Foreign Assets Control (OFAC)/Specially Designated Nationals (SDN) List 

Banking Details 

 Note: The Early Warning program to verify the Bank Account Name and the Bank Account Number is not available outside of the United States as of the publish date of this blog post.  

  •  Required Document:  Vendor Letterhead, Bank Letter or Company Branded Banking Setup Form (recommended).  I know that many International companies will have their banking included on their invoice. I do not recommend using the invoice for this purpose, but if you do, to ensure that you are not taking that information from a fictitious invoice, validate that the bank account number is the same across multiple vendor invoices.   

 SWIFT/BIC Code 

  • Reason to Validate: Ensure that International ACH or Wire payments are processed successfully. Countries that do not require an IBAN will have a BIC Code or SWIFT code along with a bank account number. 

  • How to Validate:   

 IBAN  

  • Reason to Validate: Ensure that International ACH or Wire payments are processed successfully. The IBAN is required for all bank accounts in the EU countries plus Norway, Switzerland, Liechtenstein and Hungary. The IBAN is made up of a code that identifies the country the account belongs to, the account holder's bank and the account number itself. 

  • How to Validate:   

    • Free –Verify with Vendor Bank.  There is no regulated validation for the IBAN.  IBAN validations are included with most third party's paid subscription plan.  

 Address 

  • Required Document:  IRS W-8(X) or Invoice (if remit address is different) or Fully Executed Contract 

  • Reason to Validate:  Confirms that vendors are not fraudulent attempting to use addresses that do not exist.  Also reduces the potential that check payments or distributed 1042s will not be returned causing rework for the team.  Standardizes address formats in accordance with US Postal Service (US) or Universal Postal Union (Non-US). For PO Boxes, also require a street address and validate both.  

  • How to Validate:   

Now that you have all this great information to validate Non-US vendor information, protect it. Implement internal controls and best practices to reduce the potential for letting fraudulent vendors or data into your vendor master file.  Get training or the eGuide.  

Protect the Vendor Master File from Fraud.  Keep it Clean.   

#stayhappy #puttingtheapinhappy #Vendorsetup #vendormasterfile #accountspayable 

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Debra R. Richardson,

MBA, APM, APPM, CPRS

Debra is an accounts payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors and Aramark.

For the past eight years, Debra has focused on Global Vendor Maintenance, and implemented a vendor self-registration portal for 140k+ global vendors across five Accounting Systems/ERPs. In her consultancy, she focuses on internal controls and authentication to prevent fraud in the vendor master file.

Want a handy Cheat Sheet that includes the links to the validation resources?  Sign up for my mailing list below, download the Vendor Validation Reference List and share with your entire team! All Subscribers are entered into a monthly drawing to win a Putting the AP in hAPpy coffee mug.