My question involves setting up a new supplier ...


Q. (cont.)

The purchasing team sets up the supplier, requests the W-9 and forwards to the Accounts Payable team (AP) to complete the banking. On this particular W-9, the supplier completed Line 1 (name shown on your tax return) and Line 2 (DBA: XXXXXXXXX). The invoice received in AP had supplier name XXXXXXXXX; AP updated the supplier name to XXXXXXXXX, and now we are receiving pushback from the purchasing team, stating that AP should not change the name. What are best practices here?


The supplier should be set up with the name that matches the W-9. This is the reason many companies have moved ownership to AP: AP must file the tax reports and must ensure the data is correct. They can use the second line of the address, the "attention" line, to enter the dba.

There is no right or wrong on ownership. Ownership varies:
- Purchasing owns the whole file
- Purchasing and AP share ownership
- AP owns the file
- A new department called master file owns the vendor master, supplier master and all system tables

With that said, whoever owns the master file should be trained thoroughly in W-9/W-8; 1099/1042 reporting; IRS TIN matching; and OFAC. The first step when receiving a request to add a vendor to the file is to check the OFAC list; secondly, perform the IRS TIN match to ensure the supplier sent the correct info. Most companies adopt a company rule: No W-9/W-8: the supplier will not be entered into the system until one is received. The IRS says if no TIN or SSN, withhold the tax.

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