Opening an account with a new supplier or customer is a small decision with long consequences. A supplier who delivers late or invoices wrongly will cost you for years. A customer who does not pay will cost you your profit on the sale. Most trouble could have been spotted in the first week with a few simple checks. A standard onboarding process, applied to everyone, takes less time than fixing problems later.

Know who you are dealing with

Collect basic identity details: the legal name, registration number, physical address, phone, email and the names of the people authorised to deal with you. For a company, ask for the certificate of incorporation. Check that the names match across documents and invoices. Visit the premises or have a video call for significant relationships.

Check tax status

Ask for the KRA PIN, and VAT details if they charge VAT. For larger contracts, ask for a current tax compliance certificate. How to check a business is tax-compliant before you deal with it lists the checks, and tax compliance certificate vs PIN certificate explains the documents. The VAT registration checker shows whether a business of their size would be expected to register.

Agree terms in writing

Settle prices, quantities, delivery, quality standards, payment terms and what happens if either side fails to deliver. State whether prices include VAT. For suppliers, agree lead times and returns; for customers, agree credit periods and late payment charges. A short written agreement or accepted quotation is enough for small deals; larger ones deserve a contract reviewed by a lawyer. Invoicing and getting paid on time and VAT invoices and quotations: what to include cover the documents.

Set a credit limit for customers

Decide how much credit you will give before the first sale. Start low with new customers and raise it as they prove reliable. Ask for references, and consider a deposit for large orders. Record the limit and review it. The credit control and bad debt tracker tracks limits and follow-ups, and how to collect late payments from customers gives a collection routine.

Verify bank details

Fraud often involves changed bank details. Collect the supplier's bank details in writing on their letterhead, confirm them by calling a number you already hold and record who verified them. Treat any later change with suspicion: re-verify before paying. Pay only to accounts in the supplier's name.

Withholding and tax at payment

If you must withhold tax on payments to a supplier, for example fees to contractors, set it up at onboarding. The withholding tax calculator shows the amount, and withholding tax in Kenya explained explains who must withhold. The contractor and consultant payments register and the withholding VAT register record it.

Create the account in your system

Set up a record for each supplier or customer in your books or accounting system, with the contact details, terms, tax numbers and limits. Use consistent names so reports are accurate. The supplier comparison scorecard helps you compare suppliers on price, quality and delivery. Keep the onboarding documents in a file.

Start small and watch

Make a small first order or first sale, and watch how the other side behaves. Did they deliver on time, as promised? Was the invoice right? Did they pay when agreed? Use what you learn to confirm or adjust your trust.

Review regularly

Once a year, review your main suppliers and customers: update documents, check compliance certificates, revisit terms and drop those who cause trouble. For overseas suppliers, add the checks in how to vet an overseas supplier before you pay. A consistent process protects you, treats everyone equally and builds the kind of relationships that make a business stable.

A one-page checklist

Create a one-page onboarding form that you complete for every new party: legal name and registration, PIN and VAT status, contact people, bank details verified by call-back, terms agreed, credit limit or payment terms, documents received and who approved. Sign and date it and keep it in the account file. A single page applied the same way every time catches most problems, and it shows anyone reviewing your business that you take care over who you deal with.

Remember that onboarding is not a one-off. Revisit the file whenever a supplier changes its bank account, ownership or prices, and whenever a customer asks for a higher credit limit. A short review at those moments is far cheaper than discovering a problem after money has moved.