Supplier verification: what to check before paying

Once money has left your account for a supplier in another country, getting it back is slow, costly and often impossible. Verification is the work you do before that point, while you still have every option open.

This checklist follows the order in which most buyers work: identity first, then capability, then the product, then the payment itself. It is general guidance, not legal or financial advice. For large orders, ask your bank and a lawyer familiar with the supplier's country what else they recommend.

1. Confirm the company exists

Ask the supplier for its registration documents and compare them with an independent source.

• Business registration. The legal name, registration number, registered address and date of incorporation. Many countries run a public company register where you can confirm these. Where there is no public register, a local chamber of commerce, a business information provider or a lawyer can usually help.
• Tax and export registration. Many countries require exporters to hold an export or importer-exporter registration. Ask which applies and request a copy.
• Legal representative. The name of the person authorised to sign contracts, and proof that your contact acts for the company.
• Physical address. Check that the address is a real commercial site. Maps and street imagery are a start; a video call from the premises or a visit by someone local is better.

The legal name must be the same on the registration, the proforma invoice, the contract and the bank account. Small differences are worth a question. Different company names are worth stopping for.

2. Check ownership and track record

• How long has the company traded? A newly formed company is not necessarily a bad supplier, but it changes how much you should pay in advance.
• Who owns and manages it? Search the names of the company and its directors together with words such as "complaint", "fraud" or "dispute".
• Sanctions and restricted-party lists. Screen the company, its owners and its bank against the sanctions lists that apply to your business. Your bank or compliance adviser can tell you which lists matter in your country.
• References. Ask for two or three customers in markets similar to yours, and contact them. Ask what went wrong as well as what went well.

3. Verify capability

A real company can still be the wrong company. Check that it can produce or source what it is selling.

• Site evidence. Recent photos and video of production, storage and loading, ideally live on a call where you choose what to look at.
• Export history. Copies of past bills of lading or export documents, with commercial details hidden if needed. These show that the company has shipped this product before.
• Factory audit. For larger or repeated orders, a third-party audit of the site covers capacity, processes, quality control and working conditions.
• Trader or producer. If the supplier is a trading company, ask where the goods are produced and whether you may inspect there.

4. Verify certificates and test reports

Certificates are easy to edit and easy to borrow from another company.

• Check that the certificate is in the supplier's own name and covers the product and site you are buying from.
• Check the scope and expiry date.
• Confirm it with the issuer. Most certification bodies and accredited laboratories offer an online lookup or will confirm a certificate number by email.
• For test reports, check that the sample description and date match the goods being offered, not an older or different product.

Which certificates you need depends on the product and the importing country. Confirm the list with your customs broker before you order, not after.

5. Verify the product

• Samples. Ask for samples from current production, and keep one sealed as a reference for later disputes.
• Written specification. Agree the grade, tolerances, packing and marking in writing, and attach it to the contract.
• Inspection. Agree in advance that an independent inspector may check the goods before loading. Our guide to pre-shipment inspection explains what this covers.

6. Verify the payment details

Payment fraud is one of the most common ways buyers lose money, and it often involves a genuine supplier whose email has been copied or compromised.

• Account name. The beneficiary name should be the supplier's legal company name. Be very cautious about personal accounts.
• Bank location. An account in a country unrelated to the supplier needs a clear, documented explanation.
• Changes to bank details. Treat any change as suspicious until confirmed. Call a phone number you already hold, not one in the email announcing the change.
• Document check. The bank details on the proforma invoice, the contract and any later message should be identical.

7. Match the payment terms to what you know

Verification reduces risk; it does not remove it. Structure the payment so that your exposure matches your confidence.

Our overview of payment terms in international trade explains the options and who carries the risk under each.

A quick pre-payment checklist

• Company registration confirmed with an independent source
• Legal name identical on registration, invoice, contract and bank account
• Address and site confirmed
• Sanctions screening done
• References contacted
• Certificates confirmed with the issuer
• Samples approved and a reference sample kept
• Specification and inspection rights agreed in writing
• Bank details confirmed by phone on a known number

Need support with sourcing?

Sila Trade X is a trading company that helps buyers with sourcing and trade documentation. If you would like help with a specific product, request a quote and tell us the product, quantity and destination.