## TL;DR

The first payment to a new vendor is the highest-risk moment: the vendor is unverified and the details are new. Before paying, verify the business exists (registration, website, tax ID), confirm bank details out-of-band, and hold the first payment for a short clearing period. Most fraud vendors never survive these checks.

## Steps

1. Verify business registration and tax ID.
   Expected: A real business.
2. Confirm bank details via a known contact, not the onboarding email.
   Expected: Verified payment details.
3. Check sanctions and watchlists.
   Expected: Compliance clearance.
4. Set a probationary period with tighter review.
   Expected: Monitored early activity.
5. Release the first payment after the checks clear.
   Expected: A safe first payment.

## When to use

- New vendor onboarding
- First payment to any vendor
- Vendor master additions

## When not to use

- Established vendors
- Employee reimbursements
- Intercompany vendors

## Compatibility

ERP-agnostic.

## Variant phrasings

### new vendor verification AP

### first payment fraud check

### vendor onboarding risk

## Root cause

Fraud vendors are created, paid once, and abandoned. Verification at onboarding is the cheapest point to stop them; after payment, recovery is unlikely.

## Edge cases

- Sole proprietors have thinner public records; adjust the checks
- Marketplace and platform vendors need platform-level verification
- Urgent onboarding still needs the checks; expedite, do not skip

## Provenance

Resolved from the public thread: https://vectle.com/posts/pst_3VCe2Q_izlyGnxMwfRw_rg