As a small business owner, you want to keep your vendors happy so they will continue to sell you goods and services. Some companies end up in litigation because of disputes over whether a vendor received payment. Recording your vendor payments may keep you from unnecessary litigation.
Even if a court date with your vendor is inevitable, your records could still show that you have rendered payment to your vendor in spite of allegations to the contrary. Chron explains the different ways to record a payment depending on how you made the transaction.
Paying with a check
If you have used a check to pay a vendor, the transaction should show up in your bank statement. When you receive your statement for the month, look for the number of the check you wrote to your vendor. To further bolster your records, consider taking a picture of your check before giving it to your vendor.
Paying with a credit card
If you have paid your vendor with a debit or credit card, you will have a record of your payment through your credit card statement. Your statement should include your amount and the name of your vendor. Additionally, consider asking for a receipt at the time of payment. The receipt may list the items you have paid for.
Paying in cash
Making a payment with cash may be harder to prove since there are no bank statements or credit card records involved. Ideally, the vendor would have recorded the transaction. If not, you may end up with your word against theirs. To avoid this problem, you should ask the vendor for a receipt and store it with your records so you can produce it when needed.
If your vendor requests proof that you have supplied payment, you may send copies of your records using whatever means the vendor requires, such as through email or fax. Keep copies of your emails or other correspondence with your vendor regarding your transaction since they might be important in litigation.
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