Often, the major reason for late vendor payments is not a lack of finances but a lack of correct data. Most organizations still depend on manual data collection, invoice handling, and disconnected systems, all of which are major reasons behind data errors.
Important documents and information, like W-9 collection and real-time TIN matching, are also not done at the time of onboarding. To add to the issues, collected information is very often not stored in one place, but instead scattered across emails, folders, and spreadsheets.
That is why it’s necessary to streamline this process, especially when it involves 1099 compliance and better internal controls. To make this process streamlined, vendor compliance software provides a centralized, automated way to apply policies, collect accurate data, and ensure that vendors always meet compliance requirements.
Now that you know the importance of vendor compliance software, it’s important to know which ones are best for your organization.
To make it easy for you, here’s a guide on the top 5 leading platforms that help AP and finance teams manage their vendor onboarding, compliance, and make payments more effectively. We will also explore how Zenwork Payments integrates vendor compliance with your end-to-end AP as a true vendor onboarding and compliance platform.
Top 5 Vendor Compliance Software Platforms for AP and Finance Teams
1. Zenwork Payments
Zenwork Payments is a compliance-first automated accounts payable solution that streamlines your vendor onboarding, tax details collection, payments, and 1099 compliance in one unified system. So, for each need, you don’t need to switch between separate AP and tax tools. Also, Zenwork Payments enables 1099 e-filing via Tax1099 and streamlines everything from W-9 collection to payments and 1099 reporting within a unified workflow.
Key Features
- Easy and simplified vendor onboarding
- Real-time TIN matching (designed to automate W-9 and TIN matching as early as onboarding)
- Auto-draft 1099 forms
- Audit trails with customizable payment approval workflows
- ACH and check payments
- Integration with major accounting software like QuickBooks Online
- xForce vendor portal for vendor onboarding and payment tracking visibility
Pros
- Easy and simple interface
- AP, vendor compliance, and 1099 reporting in one single system
- Eliminates the need for manual data entry
- Pricing is billed monthly and based on payers and billable vendors
Cons
- Can be overwhelming with features for teams that are not focused on compliance and end-to-end visibility
2. Tipalti
Tipalti supports global accounts payable workflows that allow users to onboard vendors simply, collect tax details, and support multi-currency payments. It’s preferred by businesses that make more international payments and organizations that have large vendor ecosystems.
Key Features
- Separate self-service portal for vendors
- W-8/W-9 tax forms and withholding support
- International payments are supported in over 200 countries and territories
- Supports integrations with ERP systems
Pros
- Well-suited for organizations making mostly international payments
- Simplified vendor onboarding and automated compliance workflows
Cons
- It can be excessive for teams that only do business domestically
- 1099 e-filing may require an integration (for example, Tax1099), depending on your Tipalti configuration
3. AvidXchange
AvidXchange is a workflow-driven AP automation platform tailored for organizations that need scalable invoice processing, role-based approvals, and audit-ready internal controls. It has a strong automated AP workflow, which is ideal for mid-market businesses and enterprises. The platform also has deep internal controls. However, you may still need separate tools for W-9 collection/validation and 1099 e-filing.
Key Features
- Large-scale invoice capture and workflow routing
- Customizable user roles and approvals
- Offers multiple payment methods
Pros
- Works well if your organization has more than one legal entity to manage in AP
- Strong focus on internal control
Cons
- May need third-party tools for W-9 collection and 1099 compliance
- Onboarding and deployment can take time
4. QuickBooks Online (BillPay)
QuickBooks Bill Pay is a cloud-based bill payment add-on for QuickBooks Online that supports vendor payments within QuickBooks. It also supports basic AP functions like bill entries, schedule payments, and vendor tracking. Although the platform covers most basic AP needs, for compliance, you may need the help of third parties.
Key Features
- Allows multiple payment methods like ACH and check payments
- Basic approval routing and user permissions
- Built-in 1099 preparation and e-filing in QuickBooks Online
Pros
- Reduces the chance of duplication between accounting and AP systems
- Simple interface
Cons
- Per-transaction fees can add up quickly QuickBooks Bill Pay pricing varies by plan and may charge extra for additional ACH and checks, and fees are subject to change
- Does not provide real-time TIN matching
5. Bill.com
Bill.com is a cloud-based AP automation software that provides integrations with multiple accounting software. The platform also digitizes invoice capture, approvals, and payments, tailored for SMBs and mid-market finance teams looking to streamline recurring AP tasks. While BILL includes compliance tools like W-9 requests and collection and 1099 filing, the exact setup and availability can vary depending on your BILL products and workflow.
Key Features
- OCR and invoice digitization
- Multiple payment options with remittance tracking
- 2-way sync with multiple accounting software
Pros
- Automation of recurring AP tasks
- Real-time invoice and payment visibility
Cons
- 1099 filing is only available if you use BILL Accounts Payable (not included for all BILL customers)
How to Choose the Right Vendor Compliance Software
When you are choosing a vendor compliance software for your organization, it’s important that you not only look at how big the solution’s feature list is, but rather focus on what your organization actually needs. With multiple software options in the market, it’s easy to get confused that’s why you should ask these four questions whenever you are shortlisting software, especially if you’re evaluating AP vendor risk and compliance tools for tighter internal controls and audit readiness.
- Does the software have automated vendor onboarding?
- Does the software provide tax compliance features?
- Does the software have multiple payment options?
- Does it come with audit readiness?
Manual entries are a major reason behind high error rates of invoices. With the right vendor compliance software, you can minimize the error rate as well as cost and IRS penalties.
When it comes to features, rather than looking at how big the list of features is, you should look for high-value quality features like W-9 collection, real-time TIN matching (to automate W-9 and TIN matching and reduce errors), plus it should be able to identify and flag high-risk vendors based on their records. Furthermore, one of the most important parts of any vendor compliance software is the integrations it allows. The ideal vendor compliance software for you should be able to integrate with your accounting software.
You can use this evaluation checklist to compare options and quickly shortlist the right software:
Evaluation Criteria Checklist
- W-9 collection and real-time TIN matching
- Should support vendors and contractors
- Integrated 1099 compliance / 1099 compliance software capabilities
- Should support multiple payment options
- Integration with accounting software
- Built-in 1099 reporting, audit trails, and role-based access control
Frequently Asked Questions
1. What is vendor compliance software?
Vendor compliance software centralizes vendor data, tax documents, and payment approvals to help apply policies and support regulatory processes.
2. How will this vendor compliance software help my AP teams?
If your AP team is working manually, then this transition can drastically reduce your team’s headache by reducing manual tracking, supporting timely payments, and ensuring that vendor data is correct and meets internal and IRS standards.
3. Does Zenwork Payments automate 1099 reporting?
Absolutely. In fact, this is one of the core features of Zenwork Payments; each applicable payment you make in Zenwork Payments auto-drafts a 1099. It’s this easy because the crucial information like W-9 collection and TIN matching (for eligible payers) can be completed during onboarding.
4. Can these tools handle contractors, too?
Yes, Zenwork Payments supports vendor and contractor workflows within the same framework.
5. What makes Zenwork Payments different?
With Zenwork Payments, you don’t need to stitch together separate AP and tax tools for compliance, since W-9 collection, real-time TIN matching, payments, and 1099 e-filing run in one workflow, which makes Zenwork Payments a complete solution for vendor payments and tax compliance.
Conclusion
Vendor compliance software is so important for modern AP and finance teams to gain control especially when it comes to processes that can get overly scattered by simplifying vendor onboarding, reducing risk, all the while ensuring smooth tax compliance. Whether you are an SMB looking to reduce your 1099 penalties or a growing enterprise looking to standardize across its multi-entities, choosing the right software can drastically transform your vendor onboarding process.
This is exactly what Zenwork Payments does; it goes beyond traditional AP automation by natively embedding vendor compliance into each and every step of the workflow from W-9 collection to 1099 reporting. If your team is ready to modernize the error-prone traditional AP with a modern AP that supports compliance at the core, Zenwork Payments should be top of your list.
Enhance vendor and contractor compliance with Zenwork Payments.