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What are vendor payments?

The process of paying vendors or suppliers for goods purchased or for services is called vendor payments. Vendor payments are commonly known as accounts payable or invoices to pay. The vendor payment is the final action and is the last process in the purchase-to-pay cycle of a firm.

Managing vendor payments is crucial as it can make or break a stable professional relationship with suppliers. Such management comprises clearing vendor invoices on or before the date-agreed-upon per the vendor management contract. By clearing timely vendor payments, you would be complying with GST laws and MSME vendor payment rules while enabling your business to grow in the long run.

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The vendor payments process

While a small group of employees usually handle payments to MSME vendors, large entities rely on dedicated accounts teams for the same. Regardless, the process is conducted by following the steps given below:

1. Collect the invoice from the vendor/supplier if they have not already sent it.
2. Check the invoice for completion and accuracy. Also, look for the approval of the vendor’s authorised signatory.
3. Account for the invoice on the accounting system and calculate the applicable taxes TDS (Tax Deducted at Source), for instance. Also, Input Tax Credit (ITC) under Goods and Services Tax (GST), wherever applicable.
4. Deposit TDS as per the due dates in the prescribed form mentioned in the Income Tax Rules. Conduct GSTR-2A and GSTR-2B reconciliation with the purchase register regularly. If vendors have not uploaded their invoices, urge them to do so and report them under GSTR-1. Report ITC in the GSTR-3B return filed, monthly or quarterly, as applicable.
5. Get approval from your business' authorised signatory on or before the appointed day of the invoice to make the payment.
6. Make the vendor payment with the net of the TDS deducted and record the same in your account books using a payment voucher. Use the mode agreed upon beforehand, whether it is UPI, bank transfer, payment gateways, etc., to make the payment.
7. Collect the receipt from the supplier/vendor and record it in your account books.

Benefits to Agents

Easy to start business and manage your supplies

Low charge and easy to manage

Check customer bank account before sending thus avoiding mistake of wrong transfer

How Vendor Payment Work

Send money in 30 Seconds

Add Vendor : To Make Payment to any of your sender any bank account add sender mobile by Sender OTP Verification in portal.

Beneficiary Registration: : Add beneficiary account details and verify it before sending.

Send Money: : Enter Amount and select IMPS/NEFT and send money and get confirmation from bank immediately.

What are vendor payments?

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How Vendor Payment Work

Sender Registration

Beneficiary Registration

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