BankingTalking Shop

Talking Shop: Verifying Payment Instructions for Vendors

By November 3, 2022No Comments

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].

Member question: “What does your company do to verify payment instructions for new vendors and changes in instructions for an existing vendor?”

Peer answer 1: “Our organization spends a significant amount of time validating changing or new banking information via phone calls. We are in the process of rolling out a service offered through a banking partner that will allow us to do this through an application they offer, but the database they use will not include every vendor.

  • “The bank we are using is U.S. Bank. They provide us an interface through their SinglePoint system to perform validations of banking information. My understanding is they use a system that all banks can have access to called Early Warning.
  • “This is a database that was created by a number of banks pooling banking information together to allow for validation and other inquiries. Another group we looked at was GIACT.
  • “We decided to use U.S. Bank because we already had a relationship with them and had access to their SinglePoint system. It was also more cost effective for us.”

Peer answer 2: “Accounts payable performs a vendor callback prior to setting up the vendor’s banking information in the ERP. Payment requests to treasury that flow outside of the ERP must be accompanied by proof of a vendor callback from the requestor. There are some exclusions to this policy.”

Peer answer 3: “We do verification calls to talk to a different person than the one that sent the wiring instructions. Exceptionally, if this is not possible due to time zone differences, language barriers, etc., we send a penny test and ask them to confirm the amount and send a screenshot from the vendor bank account statement.”

Peer answer 4: “We also do verification calls to a known contact at the vendor before setting electronic funds transfer instructions as well as before changing payment instructions. In addition, we utilize GIACT’s account validation services.”

Justin Jones

Author Justin Jones

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