Most small companies add suppliers informally. Someone needs a part, a service or a licence, finds a company, places an order and forwards the invoice to whoever pays the bills. It works until the invoice carries different bank details than last time, the delivery is late and nobody knows whom to call, or the same supplier turns up in the accounting system three times.
A short onboarding routine prevents most of this. It does not need a procurement department. It needs an owner, a checklist and a few agreed rules.
Step one: name an owner and decide whether this is a new supplier
Before anything else, decide who owns the onboarding. This is usually the person who requested the supplier, with someone from finance or the office as a second pair of eyes. One name goes on the checklist.
Then check whether the supplier already exists in your records, perhaps under a slightly different name. Duplicate records are a common source of double payments; our article on cleaning up duplicate customer and supplier records describes what that costs and how to fix it.
Step two: decide whether this supplier needs the full routine
Not every supplier deserves the same effort. A simple rule keeps the process proportionate:
- Light: a one-off purchase with low value and no access to your data or premises. Collect the basics and the invoice details.
- Standard: a recurring supplier or a larger value. Use the full checklist below.
- Extended: a supplier that handles personal or confidential data, works on your systems or is hard to replace. Add a written agreement and a named contact on both sides.
Write the thresholds down, for example by yearly spend, so nobody has to guess.
Step three: what to collect
Keep the list short enough that people actually complete it:
- Legal name, registered address, company number and tax or VAT number.
- Contact for orders, a contact for problems and a contact for invoices.
- Bank account details, received in writing from the supplier and not copied from an invoice.
- Payment terms and currency as agreed, and where they are written down.
- A short description of what is supplied, price basis and delivery or service levels.
- Whether the supplier sees personal data or has access to your systems or premises.
- Any certificates or insurance that matter for this kind of supply.
If something cannot be obtained, do not leave the box empty. Write "not provided" with a date and the reason. A visible gap is a decision; a blank field is a surprise later. When the supplier is software or a service, the questions in our article on choosing a software supplier help you ask for the right facts at the first meeting.
Step four: who approves what
The main control is a simple separation of duties. The person who requests the supplier should not be the only person who confirms the bank account. For a small team this can be as light as two people:
- Requester: states the need and fills in the business details.
- Approver: confirms the supplier is needed, within budget and not a duplicate.
- Payment check: a second person confirms the bank details by calling a number you already know, not one from the invoice or e-mail.
Any later change of bank details follows the same path. A message saying "we have a new account" is the classic route for payment fraud, so it never goes straight to payment.
Step five: record the supplier once
Enter the supplier in one place, such as your accounting system or a shared register, and link everything else to that record. Include the owner, the date of onboarding, the category (light, standard, extended) and a review date, normally twelve months ahead.
Agree who may create and change supplier records, and keep that group small. If the record has no owner, nobody will notice when the contract ends or the contact leaves. The same logic applies to systems; see our piece on who owns an internal tool after its author leaves.
The first 30 days
The first month shows how the supplier really works. Put three short check-ins in the calendar.
Day 1 to 7: first order. Confirm the order was understood as intended. Check that the order, delivery note and invoice match. Note how quickly the supplier answered questions.
Day 8 to 21: first invoice. Check price, tax, terms and bank details against the record. Pay only when the invoice matches the order. Record any difference and who resolved it.
Day 22 to 30: short review. The owner asks three questions: did delivery meet what was agreed, was communication clear, and would we order again on the same terms? Write down the answer in two lines on the supplier record. If the answer is no, decide now whether to fix, limit or stop.
Common mistakes
- Treating the first order as the onboarding and doing the paperwork never.
- Taking bank details from an invoice or an e-mail without a second check.
- Creating a new record because the old one could not be found.
- Collecting a long list of documents that nobody reads.
- Having no review date, so a supplier stays on the list for years without anyone deciding to keep it.
Summary
Supplier onboarding for a small company comes down to a named owner, a proportionate checklist, a second person who confirms payment details, one clean record and three check-ins in the first 30 days. It takes less time than correcting a wrong payment, and it leaves you with a record that shows who decided what and when.
Sources
- Our related articles linked above.
- The checklist and thresholds are a working practice for small companies, not a legal or accounting standard; adapt them to your size, sector and local rules. No client results or market figures are claimed in this article.
