In order to process bills accurately and efficiently, the finance team will need several key pieces of information and documentation for each bill. Information related to the budget will be necessary to code the expenses to the correct category, team, and program. Banking details will be necessary so that electronic payments can be made to the vendor (no paper checks are being cut in our work from home environment). Special tax forms will need to be filed when paying independent contractors. And clear documentation of manager approval is necessary when dealing with large cash payments.
- It is best practice at B Lab for the Budget Leads to review and approve all contractor/consultant bills. The approver may be the ‘program budget lead’ or the ‘team budget lead’, depending on who manages the contractor/consultant. More information can be found in the Fresh Desk article Contractor Payment Protocol.
- Bills should be submitted to finance by the 10th of the following month whenever possible.
- Attach all signed contracts with vendors into Salesforce.
- Please review the workflow detailed below and complete all required steps before submitting a bill for payment. If you have any questions about the process, please reach out to the finance team.
Workflow for Sending Bills to Finance:
When you receive a bill from a vendor, please follow these steps to submit it:
Review the bill for any errors
Add a text box on the bill detailing the following fields:
B Lab Functional Team
B Lab Program
Philanthropic Funding source, if known
The Budget Manager needs to add their electronic signature to all bills over $5,000
Send the bill along with the following documents to our firstname.lastname@example.org email:
Vendor’s electronic banking details
Tax forms for any contractors
Fully executed Contractor/Consultant agreement with first bill submission
Contracts and agreements should also be attached in Salesforce (see additional steps below)
Here is an example of what a completed bill should look like.
Required Fields for Bills:
As you review and submit bills for payment, here are the fields that should be present on all bills:
Name of vendor/contractor/consultant
Address of vendor
Description of product or service, and a timeline of when services were provided
Final amount due (and currency - if different than USD)
Hours Worked x Hourly Rate with Total Invoice Amount, if applicable
Attaching Contracts into Salesforce:
Any contract or agreement signed with a vendor/contractor/consultant should be recorded in Salesforce for documentation. A vendor account should be created for all new vendors and files attached to the profile. Please follow these steps:
Create a vendor account in Salesforce (for any new vendors)
Click the dropdown arrow next to Accounts and select "New Account".
Select "Vendor" in the following selection screen, and fill out all relevant information, then save.
Navigate to the vendor account and select "Files"
Upload any contracts or agreements as a new file
Additional Information for Unique Payment Situations:
If you are planning on working with an independent contractor, please be sure to review the many independent contractor Freshdesk articles detailing what forms and documentation are required to establish a contract and onboard new contractors.
From a financial perspective, B Lab must file a 1099 form for all US based contractors who receive more than $600 USD during the year. In order to comply with this requirement, B Lab will need a copy of the contractor’s W9 Form, which will list key information, including the legal name and address of the contractor, as well as their Tax ID (Social Security Number or EIN). Some contractors may do business through a single member LLC. A W9 is still required for these contractors, as a 1099 will still need to be issued. Best practice is to collect a W9, even if you are unsure. Many contractors already have a completed W9 on file to send to their customers. A blank W9 form is linked in the workflow above for reference.
As a global organization, we also establish contracts with international contractors as well. In these situations, no 1099 form is issued, however there can still be tax implications. International contractors are required to pay US taxes on any “US source income”. Per the IRS, international contractor’s income is considered “US source income” if their services were performed within the US. B Lab is required to collect a W8BEN form from any international contractors to document their foreign status and US tax responsibility. Many contractors who do business in the US should be familiar with the W8BEN process, and may already have a completed form that they can send to B Lab. A blank W8BEN form is linked in the workflow above for reference.
Honorarium payments are sometimes made to individuals for speaking engagements or other services. These situations often lack a formal bill, but documentation and compliance is still necessary. If you want to request an honorarium, please send the request via email to our email@example.com email, and be sure to include all required documentation, including banking details and tax forms if the payment will be over $600.
Reimbursements to Non-Employees:
Sometimes payments need to be sent to non-employees to reimburse them for certain expenses (oftentimes for travel to a B Lab event). In these situations, receipts for the reimbursable charges are required to be submitted to finance, along with banking details. No tax forms are required in these circumstances, as reimbursement payments are not considered taxable income.
We appreciate your partnership to improve our bill paying process, cut down on unnecessary back-and-forth, and ensure our financial reporting remains accurate and timely.
The Finance Team