Payment to Vendors (US and Foreign)
Domestic Vendors
Accounts Payable uses three methods to pay US vendors: live check, credit card (ePayables) and ACH (Paymode-X). As part of the University's plan to minimize the use of checks, vendors are encouraged to enroll in ePayables and Paymode-X, which are faster and more secure than live checks.
Electronic Payments
PPS manages the conversion and administration of vendors receiving electronic payments, as the default method of payment in the vendor table, from Northwestern University through ePayables (Credit Card) or Paymode X (ACH).
We strongly recommend that departments and schools encourage vendors and individuals to sign up for one of the following electronic payment options:
- ePayables for Vendors (entities): this is a credit card program that pays invoices by a VISA credit card.
- Paymode X (ACH payments for Vendors (entities)): this is a direct deposit program that sends ACH invoice payments directly from Paymode X to the vendor's specified bank account.
- Concourse/NUQuickPay for Individuals: this program pays individuals electronically via Zelle or ACH.
Invoice Requirements
- Suppliers must provide a detailed invoice for all goods and services.
- Visit the Payment Overview webpage for details about invoice submission requirements.
Accounts Payable Process Steps
- When invoices are received, AP reviews and enters them as vouchers in NUFinancials.
- Approved vouchers pay out using one of the payment methods described above.
Learn more about paying an invoice
International Vendors
The University is required to establish the tax status of foreign entities with which it conducts business. The W-8BEN submitted by a foreign entity indicates whether taxes need to be withheld when payments are processed. Transactions that may trigger tax withholding include services performed in the US, and US-sourced royalties and rents. A foreign entity from a country that has negotiated a tax treaty may be exempt from tax on certain types of transactions. If they are from a country with no treaty benefits, or the activity is not covered by the treaty, payment to the vendor is subject to 30% tax withholding.
All foreign vendors are placed on a payment "hold" to ensure that all requests for payments are reviewed for tax compliance prior to payment being processed.
Each W-8BEN is reviewed for tax status determination, and each invoice submitted for payment is reviewed by Accounts Payable for taxable-type transactions.
Payments to foreign vendors are made via U.S dollar checks, and by electronic funds transfer in U.S. dollars or the foreign currency. The process for paying a foreign vendor is described in the Electronic Funds Transfers Policy.
Invoice Requirements
A foreign vendor must provide an invoice that specifies each individual activity and location of the activity. Depending on the type of payment, an additional Location of Services form or Cloud Computing form may be requested during the review process.
- For services, identify:
- portion attributable to each service provided
- location where the services were furnished
- For tangible goods, identify:
- Merchandise, equipment, etc.
- For cloud computing, identify:
- whether the cloud software is hosted remotely or installed on Northwestern's servers
- If hosted remotely, whether the servers and the employees that maintain/operate the servers located inside the US or outside the US
- whether the vendor outsourced the server hosting and other functions to related and/or unrelated agents or service providers
- For other, identify
- Any portion attributable to royalty fees
- Any rental fees and location of rental
Accounts Payable Process Steps
If the invoiced activity is a taxable type of transaction for that foreign vendor, AP will process as follows:
- Chart string is charged for full amount of invoice.
- Taxable portion (30% or % per treaty) is withheld and paid to the IRS.
- Payment to the vendor is net of withholding tax.