In general, is it best practice to issue payment to a collection agency or directly to the vendor? There is a SOW and documented invoices with the vendor.

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If the vendor has turned over collection to a collection agency, pay the collection agency. However, the 1099 (if applicable) goes to the vendor, not the collection agency. Note that most accounting systems can accommodate agents or factors – often an additional remit-to or optional field in the vendor record.

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