How do you verify the identity of your subcontractors and suppliers?

1 Check their credentials

One of the first steps to verify the identity of your subcontractors and suppliers is to check their credentials. This means looking at their licenses, certifications, insurance, references, and reviews. You can use online databases, directories, or platforms to find and verify this information, or ask them to provide it to you directly. Make sure that their credentials match their names, addresses, and contact details, and that they are valid and up to date.

2 Request a W-9 form

Another way to verify the identity of your subcontractors and suppliers is to request a W-9 form from them. A W-9 form is a tax document that provides their name, address, tax identification number, and business entity type. You need this form to report the payments you make to them to the IRS, and to issue them a 1099 form at the end of the year. A W-9 form also helps you avoid paying backup withholding taxes, which are required if you don't have their tax information.

3 Use digital signatures

A third method to verify the identity of your subcontractors and suppliers is to use digital signatures. A digital signature is a secure and legally binding way of signing documents online, using encryption and authentication. You can use digital signature software or platforms to create and send contracts, invoices, and other documents to your subcontractors and suppliers, and to receive their signatures in return. A digital signature verifies the identity of the signer, the integrity of the document, and the date and time of the signature.

4 Confirm their bank details

A fourth technique to verify the identity of your subcontractors and suppliers is to confirm their bank details. This means checking that the bank account name, number, and routing number match the name and address of the subcontractor or supplier you are paying. You can do this by asking them to send you a copy of a voided check, a bank statement, or a letter from their bank. You can also use online payment services or platforms that verify the bank details of the recipients before sending the funds.

5 Communicate directly

A fifth tip to verify the identity of your subcontractors and suppliers is to communicate directly with them. This means avoiding third-party intermediaries, brokers, or agents that might try to impersonate or misrepresent them. You can use phone calls, emails, video calls, or face-to-face meetings to establish a rapport and a trust with your subcontractors and suppliers. You can also use these channels to confirm the details of the work, the invoices, and the payments, and to resolve any issues or disputes.

6 Monitor their performance

A sixth suggestion to verify the identity of your subcontractors and suppliers is to monitor their performance. This means tracking and evaluating the quality, quantity, timeliness, and cost of the services or materials they provide. You can use online tools, software, or platforms to monitor their progress, deliverables, and feedback. You can also use site visits, inspections, audits, or reports to verify their compliance with the contract, the standards, and the regulations.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?