Vendor Onboarding Checklist (with GST, PAN, MSME) — Free

Vendor onboarding is the process of collecting, verifying and approving a new supplier's documents before they can be paid. Done well, it protects you from compliance gaps, fraudulent accounts and lost input tax credit. Done badly — or skipped under deadline pressure — it shows up later as held invoices and statutory headaches. This free checklist is built for Indian procurement: GSTIN, PAN, MSME/Udyam and bank verification are all first-class steps.

The full onboarding checklist

Tax & statutory

• GSTIN (15-digit) and a copy of the GST registration certificate. Verify it's active — without a valid GSTIN you cannot claim input tax credit on their invoices. Note composition-scheme or unregistered vendors separately.
• PAN — required for TDS deduction and statutory reporting. Confirm the PAN embedded in the GSTIN matches the standalone PAN.
• MSME / Udyam registration — capture the Udyam number if the vendor is a Micro or Small enterprise. It triggers the 45-day payment rule under the MSMED Act and supports vendor-diversity reporting.
• TDS / lower-deduction certificate — if the vendor has one (e.g. under Section 197), record it so you deduct at the correct rate.

Banking & identity

• Cancelled cheque or bank letter — to verify the exact account name, number and IFSC for payments. This is your front line against payment-redirection fraud.
• Registered & dispatch address proof — for KYC, correspondence and to confirm the place of supply (which sets CGST/SGST vs IGST).
• Authorised contact — name, designation, email and phone of who you'll actually deal with.

Capability & legal

• Quality / ISO / industry certificates — proof they can meet your spec (e.g. ISO 9001, BIS, drug licence for pharma, factory licence).
• Signed vendor agreement / NDA — terms, confidentiality, code of conduct and, where relevant, anti-bribery undertakings.
• Insurance / safety docs — for service vendors working on your premises.

Internal activation

• Verification sign-off — someone independent confirms the documents are genuine and complete.
• Approval via your [approval workflow](/glossary/approval-workflow) — a record of who approved the vendor and when.
• Vendor code & master-data entry — create the supplier record so it can be linked to POs and invoices.

How to use this checklist

1. Send the vendor a single request listing every document above — don't drip-feed it over multiple emails.
2. Verify each item as it arrives: tick GSTIN against the GST portal, match PAN, and confirm bank details from the cancelled cheque.
3. Flag the vendor's MSME status clearly so accounts payable applies the 45-day rule.
4. Route the completed pack through an approver, then generate a vendor code to activate them.
5. Re-verify periodically — GST status and bank details change, and stale master data causes payment failures.

Common mistakes

• Skipping GSTIN verification — an invalid or cancelled GSTIN silently costs you input tax credit.
• Trusting emailed bank details — always verify against a cancelled cheque to avoid fraud.
• Ignoring MSME status — you miss the statutory 45-day payment obligation and risk interest liability.
• No independent sign-off — the person who sources the vendor shouldn't be the only one who approves them.
• One-and-done — never re-checking means stale data and failed payments down the line.

Onboard vendors in under a minute with Procupy

Collecting these documents over email and chasing missing pieces is the slowest part of starting with a new supplier. Procupy's vendor management turns this checklist into a self-serve flow: the vendor fills a guided form, uploads GSTIN, PAN, Udyam and bank proof, and the system validates formats and flags MSME status automatically. A built-in approval workflow routes the pack for sign-off and assigns a vendor code on approval — so onboarding takes minutes, not days, and every document is audit-ready.