How to verify supplier bank account details before you send money

TL;DR: Verify supplier bank account details by matching the account name to the supplier legal entity, using a formal change-control process for any bank changes, making a small test payment or requiring bank-stamped confirmation, and keeping clear internal approvals and records before you release full funds.

Confirm the account name matches the supplier legal entity

Confirm the account name on the bank details exactly matches the supplier legal name before you send money. Practical checks include matching the account owner to the business name on the contract, purchase order, and company registration. If the supplier provides an invoice, compare the invoice company name with the account name. If the names differ, pause payment and ask the supplier to explain and provide legal paperwork.

Ask for one or more supporting documents:
– A copy of the company business license or registration showing the legal name.
– A bank account confirmation letter on the bank letterhead signed by the bank or an official account opening document.
– A remittance advice from a previous transaction showing the exact beneficiary name.

Require corporate accounts for business payments. Do not send large sums to individual or personal accounts. If a supplier insists on using a personal account, consider this a high risk and escalate to procurement and finance.

Implement a formal bank-detail change-control process

Implement a formal change-control process that you will follow every time a supplier requests a bank-detail change. A short, enforced checklist reduces human error and stops many fraud attempts.

Use this checklist before accepting any new bank details:

Step	Required action
Written request	Supplier sends request on company letterhead with reason for change and effective date
Verification call	Call the supplier using the phone number you already have on file, not the number in the change request
Secondary confirmation	Obtain a second confirmation from an independently known contact at the supplier, for example the sales director or finance manager
Bank proof	Request bank-stamped confirmation or recent account statement with bank header showing the account name
Approval	Require two internal approvals from procurement and finance and record them

Set a mandatory waiting period before you act on changes. A 48 to 72 hour cooling-off window gives time for phone verification and reduces pressure-driven mistakes. Make the process part of your supplier master data rules so everyone follows the same steps.

Use small test transfers and payment confirmation

Use a small test transfer to confirm the account before sending the full payment. A practical approach is to transmit a low-value amount and verify that the supplier can demonstrate receipt from their bank.

Decisions to make:
– Threshold for a test transfer. For most transactions a test transfer under $100 is adequate. For higher risk or new suppliers, use a larger proportionate test sum.
– Evidence required. Ask the supplier for a copy of the bank statement line or a SWIFT MT103 showing the incoming funds. Prefer bank-stamped statements or SWIFT advice over simple screenshots.
– Escrow or conditional payment. When trust is low and order values are high, use an escrow service, letter of credit, or payment through a trusted intermediary. These options add cost but reduce exposure.

Record the test transfer details in your payment file. Attach the MT103 or bank receipt and the supplier confirmation before releasing the balance.

Watch for red flags and respond immediately

Watch for common red flags and stop payment activity if you see them. Typical warning signs include unexpected emails requesting an urgent change, new email addresses that mimic supplier domains, new bank accounts in different countries, or requests to use personal accounts.

If you spot a red flag:
– Pause the payment and notify your finance team.
– Call the supplier using the phone number you have previously used.
– Ask for bank-stamped confirmation and a contract amendment signed by both parties.
– If you have already initiated the transfer, contact your bank immediately and provide the payment reference to request a recall or trace.

If fraud is suspected, keep all related emails and transaction records. Escalate to your bank and consider notifying local law enforcement or cybercrime authorities as appropriate for your jurisdiction.

Keep records and build internal controls

Keep clear records and assign responsibility for payment approvals before you send money. Good recordkeeping and segregation of duties make mistakes harder to happen.

Practical controls to adopt:
– Segregation of duties. Make sure the person who requests supplier setup is not the same person who approves payments.
– Mandatory documentation. Store the signed change-control form, the bank proof, remittance advice, SWIFT proof, and internal approvals with each supplier payment.
– Periodic review. Review your supplier master file and bank details every six months or after any major change.
– Audit trail. Maintain an auditable trail that includes timestamps for verification calls, approver names, and document scans.

If your team lacks resources for verification or visits, consider using third party services for supplier checks and on-site verification. For help arranging verification and payment controls, see our supplier sourcing and verification services and our quality control options. You can also arrange an in-person factory visit to confirm company identity.

Next step

If you want a practical change-control template or a supplier verification checklist tailored to your purchases, contact Supplier Ally to discuss how we can help set up bank-detail verification and payment controls for your China suppliers. Visit our contact page to begin.