Paying a different vendor than invoice

Anon,

Can you provide a little more detail there? Is it in the contract? Paper trail? Have goods/services changed hands? If it is all documented, this sounds completely fine and not abnormal at all. But....devil is in the details. You want to make sure that you have title to the goods free and clear, would be my biggest concern.

One theoretical situation is that there is a local (to you) entity that handles (for a fee) invoicing and collections for the foreign company, almost like a consignment operation or a broker. The foreign company doesn't have to deal with banks, etc, and can make their sales and only have one local entity to deal with. This I've run into in Japan, where the buyer will only deal with local companies, so you need to pay a pretty hefty vig (15% or so) to one of a select few companies, chosen by the buyer, in order to get the sale.

Cheers,

KP

I'd look into the business AND legal issues behind this request. Why do they want to do it? Are the parties related to each other; does your vendor owe money to the US party; is your vendor in a country where exchange control regulations are burdensome and your vendor is trying to bypass those regulations? Can you talk to the US party to establish this is all above board? Is this a one off request or something likely to be repeated in the future?

Get vendor responses in writing first, before you decide.

If the invoice from the foreign vendor can be legitimized, and the invoice states that payment is to be made to a 3rd party designated Company located in the US vs the original company, then I don't see an issue.

The issue is when they want a payment made to a 3rd party in a different country than theirs.