The IRS payment reporting form for foreign payees. It is similar in purpose to the IRS Forms 1099. U.S. organizations must report certain payments made to foreign persons, which includes foreign partnerships, corporations, estates, etc., as well as non-resident alien payees. Payees also receive a copy.


An IRS information return form used by payers to report to the Internal Revenue Service payments made to payees. Payees also receive a copy. There are different 1099s for different types of income payments. Within an accounts payable (AP) context “1099” refers to the IRS forms 1099-MISC and 1099-NEC on which payers report payments made to vendors, suppliers, landlords and for non-employee services, as well as royalty and other payments. Form 1099-K is a form used by third-party payers such as credit card companies to report payments made via credit card or purchasing card.

1099 MISC

The IRS form used by organizations to report income earned by individuals who are not employees, such as independent contractors and self-employed individuals, and including such payments as rents and royalties..

1099 NEC

The iRS form used by organizations to report nonemployee compensation for services.


A means of organizing and tracking financial activities; a record of financial transactions related to a particular category, such as assets, liabilities, revenues, or expenses.

Account number

A unique identifier assigned to an individual account within a financial institution, used to distinguish one account from another.


The process of systematically recording, summarizing, analyzing, and interpreting financial transactions and information to provide insights into the financial health of an individual, organization, or entity.

Accounting Equation

Accounting EquationAlso known as the "Balance Sheet Equation," it states that a company's total assets are equal to the sum of its liabilities and owner's equity. It is represented as: Assets = Liabilities + Owner's Equity.

Accounts Payable

In accounting, a liability account that represents the amount a business owes to its suppliers or creditors for goods and services received on credit--short-term obligations to pay. Also the department responsible for managing and processing accounts payable.


Automated Clearing House -- A network that facilitates electronic funds transfers and direct deposits between financial institutions. It allows for secure and efficient electronic transactions, including payroll deposits and accounts payable (bill) payments.


The American Institute of Certified Public Accountants -- leading professional organization for certified public accountants (CPAs) in the United States; AICPA sets standards for the accounting profession and provides resources and support to its members.


Anything of value that an individual, organization, or entity owns or controls, which can provide future economic benefits. Assets include tangible items (such as cash, property, and equipment) as well as intangible items (such as patents and trademarks).


Backup withholding warning notification. When a 1099 is missing the payee taxpayer identification number (TIN) or the TIN is incorrect, the IRS sends a notification (form CP2100 or CP2100A) to the payer. The B-notice is the notice that the payer sends to the payee, though sometimes the CP2100 is referred to as a b-notice. The B-notice alerts the payer that within 15 days the payer must contact the payee and request a W-9 with a correct TIN or it will begin backup withholding on further payments. The purpose of B-Notices is to ensure that accurate TIN information is provided by payees to payers for tax reporting purposes. It's important for payees to respond to B-Notices and provide correct TIN information to avoid backup withholding and potential penalties. See IRS Publication 1281.


Business-to-Business--Refers to commercial transactions and interactions that occur between two businesses rather than between a business and individual consumers.


Business-to-Consumer--Refers to commercial transactions and interactions between a business and individual consumers.

Balance Sheet

A financial statement that provides a picture of a company's financial position at a specific point in time; it lists the company's assets, liabilities and owners equity.

Bank Account Verification

The process of confirming that a bank account belongs to a specific person or organization. This is often done by verifying the account holder's name, address, and other personal information.


The process of recording, organizing and maintaining financial transactions and records.


Business process outsourcing--the practice of contracting specific business processes or tasks to third-party service providers with the intent to gain efficiency and reduce costs.

Business Email Compromise (BEC)

A type of fraud in which criminals impersonate a legitimate business in order to trick victims into sending them money. BEC attacks often involve sending emails that appear to be from a trusted source, such as a bank or a vendor. The emails will often contain a sense of urgency, such as a request to wire money immediately.


The act of following rules and regulations. In the context of vendor information, compliance refers to the process of ensuring that an organization collects, verifies and maintains information to meet the requirements of applicable laws and regulations.

Corporate Card

A credit care issued to employees for authorized business expenses.


The practice of protecting computer systems and networks from unauthorized access, use, disclosure, disruption, modification, or destruction. Cybersecurity encompasses a range of activities from security software to employee training.


"Doing business as" - A business or brand name rather than the orgainziation's legal name.


Payments made by a corporation to shareholders from its profits as a return on shareholder investment.

DUNS number

A unique nine-digit number assigned to businesses to track and identify them by Dun & Bradstreet.


Electronic bill presentment and payment; the process of delivering bills to customers electronically and enabling them to make payments online.


Electronic Data Interchange--a system for the electronic exchange of business documents such as orders, invoices and shipping notices in a standardized format between trading partners.


Electronic funds transfer--the electronic movement of money from one bank account to another, usually initiated for payments or deposits.


An Employer Identification Number (EIN) is a nine-digit tax identification number of a business assigned by the Internal Revenue Service; also called a federal employer identification number or FEIN, or Federal Tax Identification Number (FTIN).


Electronic invoice presentment and payment; the process of presenting electronic invoices to customers and allowing electronic payment.


Enterprise Resource Planning, an integrated software system used to manage various business processes, such as accounting, human resources, inventory, and customer relationship management.


Evaluated Receipts Settlement--A procurement and payment process where invoices are matched with receiving and inspection data only to streamline payment.

Form 8233

IRS form used by a foreign individual recipient of U.S.-source income for personal services to document their status and claim reduction or exemption from withholding. This form should be used in place of a W-4 for a foreign individual contractor providing personal services.


A deception or misrepresentation that is intended to gain something, such as money or property, by taking advantage of someone else. Fraud is committed in a variety of ways, including through phishing emails, identity theft, credit card and vendor fraud.


Generally Accepted Accounting Principles--The U.S. standardized accounting principles and guidelines used to prepare and present financial statements in a consistent manner.


General Data Protection Requirement of the European Union, the GDPR is the set of data protection rules across EU countries. It went into effect in May 2018, updating and standardizing privacy and data protection rules, and significantly increasing fines for violations and failures. It applies to all organizations that hold or process personal data of EU residents, regardless of organization location, thus it applies to organizations outside the EU as well as inside.

Ghost Card or Supplier Card

A virtual credit card used for purchasing goods and services; a temporary card number is generated for each transaction.


General Ledger--A master record of all financial transactions in a company, organized by account and used to prepare financial statements.


Interactive Financial Exchange--A standard for electronic financial transactions and messaging between financial institutions and customers.


A request for information or clarification, often related to financial or business matters, such as a vendor asking when an invoice will be paid.

Internal controls

The policies and procedures that an organization puts in place to ensure the accuracy and reliability of its financial reporting, operations, and compliance with laws and regulations. There are three typies of Internal controls: preventative, detective and corrective.


A document sent by a vendor to a buyer specifying goods or services provided and the amount of payment due.


Individual Taxpayer Identification Number (ITIN) is a nine-digit tax identification number for those required by the Internal Revenue Service to have a TIN but ineligible for a Social Security Number (SSN), including both resident aliens and non-resident aliens. An ITIN is for tax reporting and filing purposes and does not grant the bearer a right to work. The first digit of an ITIN is 9, and it will have a 7 or 8 in the 4th digit position, e.g. 9XX-8X-XXXX.

KPIs (Key performance indicators)

A critical metric that is used to measure performance. KPIs are metrics used to track progress towards achieving specific goals.


A measurement of a specific aspect of a business or organization used to monitor activity or track progress, identify trends, and make decisions.


The Office of Foreign Assets Control, OFAC is an office of the United States Treasury Department that “administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.” OFAC aggregates, maintains and publishes lists of sanctioned individuals and entities, including the SDN list, Consolidated Sanctions list, and others, and enforces compliance with the various sanctions.


Open Financial Exchange--A file format used for financial data exchange between software applications, often for online banking and financial transactions.


To execute all steps necessary to integrate a new vendor into a working relationship with one’s organization, from validation of legitimacy and suitability through gathering and recording requisite information for purchase transactions and tax and regulatory compliance. “Vendor Onboarding” refers to the process of such execution.

Packing Slip

A document included with a shipment that lists the contents of the package, used for verification upon receipt.


A secret combination of characters that is used to authenticate a user to a computer system or network. Passwords should be long, strong, unique, and changed periodically.


The transfer of funds from one party to another as settlement for goods or services received.


In a digital context, a portal is an interface--typically a web site--providing access to a system for exchange of information. It provides users with access to various resources, information, and services.

Purchase Order (PO)

A formal document issued by a buyer to a seller indicating the products or services to be purchased and the terms of the transaction.


A document confirming the delivery of goods or services, often including details of the transaction.


The process of (and sometimes a department for) inspecting and recording the receipt of goods or services, often as part of inventory management.

Remit to

The designated address or entity to which an organtion should send payments, typically included on invoices.


The income produced by a business from its operations, including sales of goods, services and other sources.

Routing number

A nine-digit code used in the U.S. to identify a bank or credit union in financial transactions.


System for Award Management, an official U.S. government website provided by the General Services Administration (GSA), through which businesses register to do business with the federal government. To become a contractor or supplier to the government, businesses must have an active registration in SAM. SAM includes lists of approved and of excluded parties—i.e. those blocked from federal government contracts. SAM’s aggregation of lists includes the Central Contractor Registry (CCR), the Federal Agency Registration (FedReg), Online Representations and Certifications Application (ORCA), and the Excluded Parties List System (EPLS) – and also the Office of Inspector General (OIG) exclusion list (which has to do with protecting Medicare and Medicaid).


In the context of government policy relating to business transactions, a sanction is a restriction imposed by a government or international authority against individuals, entities, or countries to enforce law and foreign policy objectives.

Sanctions list

Governments and financial authorities worldwide maintain lists of sanctioned entities according to laws and foreign policy objectives. These lists identify parties engaged in illicit activities such as narcotics trafficking, WMD proliferation, money laundering, and terrorism. The U.S. maintains the SDN list and others; other countries and alliances maintain or consolidate similar lists, from the U.K. to the European Union to the United Nations.


The Specially Designated Nationals list of sanctioned individuals and entities, maintained by OFAC as part of its administration and enforcement of U.S. government sanctions. SDNs include persons and organizations engaged in terrorism, international narcotics trafficking, proliferation of weapons of mass destruction, and other such illegal activities internationally.


A circumstance in which an individual serves himself or herself, rather that applying to someone else for help. While typically implemented to save money by having customers do for them selves what someone once did for them, customers have accepted it due to the control gained over a process, and increased efficiency. As applied to vendor relationships, self-service refers to providing vendors a way to quickly find answers themselves to invoice and payment status questions through an online vendor portal.

Shared Services

A organizational structure whereby certain common business functions, such as finance, IT and HR are consolidated within an organization and provide services to all units, providing efficiency and economy of scale.


A Service Level Agreement, which is a contract or agreement that outlines the expected level of service and performance standards between a service provider and a customer.


Social security number, the nine-digit tax identification number (TIN) of an individual U.S. citizen.


A summary of financial transactions or activity over a specific period, commonly provided by banks, credit card companies, and other financial institutions,and also by vendors to their customers.


A person or company that provides needed material, product or services to others (sometimes used interchangeably with vendor).

Tax treaies (U.S.)

The United States has income tax treaties with many countries under which non-U.S. residents of treaty countries are eligible to be taxed at a reduced rate or be exempt from U.S. income tax on U.S.-source income. These reductions or exemptions apply to the otherwise 30 percent mandatory withholding on U.S.-source payments made to them. Payees can claim reductions or exemptions on the IRS W-8 series of documentation forms. Reduced rates vary by country and specific income types. See Tax Treaties on the IRS website.


Tax identification number, such as a social security number (SSN) of an individual, or an employer identification number (EIN) of a company; used by tax authorities to identify a person or entity.


The Uniform Commercial Code, which is a set of standardized laws that govern various commercial transactions and business activities in the United States.


Any supplier of goods or services to your organization.


A person or company that offers products or services for sale to others (the term is sometimes used interchangeably with supplier).

Vendor email compromise (VEC)

A type of fraud in which criminals hack into a vendor's email account and use it to send fraudulent invoices or requests for payment to the vendor's customers. VEC can lead to financial losses and reputational damage.

Vendor Information Management

Vendor information management (also known as supplier information management) is the practice of requesting, receiving, verifying, approving and maintaining the information required of a vendor (supplier) to do business with an organization. To order, receive and pay for products or services from a vendor, an organization must have specific information about that vendor. The organization must verify the vendor as a legitimate business concern and collect and verify specific information about the vendor. The required information includes not only such basics as legal name, address and contact but also correct payment details and other information for compliance with tax and regulatory issues, including sanction status and additional particular vendor classifications, licenses or statuses. Vendor information management, then, involves confirmations of the vendor and its information and the maintenance of that information as it changes over time to facilitate commerce with that vendor.

Vendor Inquiry

Request for information or answers to questions. In the context of accounts payable, often refers in requests by internal and external personnel (employees and vendors) regarding vendors’ invoice and payment status.

Vendor Master File

A database containing a list of vendors with detailed information used by an organization for procurement and payments.

Vendor onboarding

The process of bringing a new vendor on board to do business with an organization. Vendor onboarding typically includes steps such as collecting and verifying the vendor's information, assessing the vendor's risk profile.

Vendor portal

A secure online portal that facilitates vendors' business with an organization. Vendor portals typically provide vendors with access to information such as purchase orders, invoices, payment status, and allow vendors to securely submit requred information such as tax and bank account information.


A series of Internal Revenue Service forms applicable to foreign persons and non-resident aliens, who earn U.S.-source income, to document their status, report U.S. individual tax identification numbers for foreign individuals (ITINs) or foreign tax ID numbers if applicable, certify accuracy, and to claim exemption from backup withholding. Different types of W-8 apply depending on the nature and status of the foreign payee (see below), the most common being W-8BEN and W-8BEN-E.


IRS form used by individual non-resident aliens with U.S.-source income to document their foreign status and claim exemption from withholding.


IRS form used by foreign entities with U.S.-source income to document foreign status in regard to U.S. income tax, claim tax treaty benefits or exemption, and for FATCA purposes. The form is used to establish non-U.S. status, claim status as the beneficial owner of income, claim reduction in or exemption from tax withholding under chapter 3 of the U.S. tax code, and identify the entity’s category under chapter 4 (FATCA) of the code.


IRS form used by foreign entities with U.S.-source income effectively connected with the conduct of a trade or business in the United States.


IRS form used by any “foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U.S. possession” receiving U.S.-source income to document status and claim exemption from withholding under section 115(2), 501(c), 892, or 895, or claiming a reduced rate of withholding under section 1443(b) of the Internal Revenue Service code.


IRS form used by foreign entities that are intermediaries rather than beneficial owners of U.S.-source income.


An Internal Revenue Service form used by payers to solicit and payees to report tax identification number and tax classification information, and to claim exemption from withholding. Used by U.S. citizens and resident aliens.


A list of individuals or organizations that are suspected of being involved in criminal or terrorist activity. Watchlists are used by law enforcement, government and financial institutions to identify and track potential threats.

Wire Transfer or Wire Fund Payment

Wire Transfer/Wire Fund Payment: An electronic transfer of funds from one bank account to another, often used for large or international transactions.