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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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3–50. Issue a Welcome Packet to New Suppliers

When a company gains a new supplier, it rarely bothers to inform the supplier about its payables processing rules. As a result, the supplier uses its standard billing procedures by default, and is rightfully surprised if those procedures do not mesh with the company’s payables system, resulting in delayed payments.

The solution is to create a welcome packet for new suppliers. At a minimum, this should contain a W-9 form and a note that no payments will be made to the supplier until the form is properly completed and returned to the company. However, the welcome packet can contain a great deal more information that will assist in the development of smoothly interlocked billing and payable systems between the supplier and the company. For example, the welcome packet can include the following additional information:

  • Mailing address. The welcome packet should clearly state where all supplier invoices are to be mailed. This is especially important if the company digitizes all incoming invoices, because these invoices must first be routed through a high-volume scanning operation that is usually fed from a single mailing address.

  • Purchasing reference. Most companies want to see an authorizing purchase order number posted prominently on an invoice, so they can easily research the payment authorization. If invoices are not supported by a purchase order, then specify in the welcome packet the procedure suppliers are to follow in regard to the ...

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