How to check a supplier before paying an advance

Before paying a new supplier in advance, check that its GSTIN is active and the legal name matches the invoice and bank account, look at its GST filing history and registration age, ask for references, and start with a small order. Pay only to a business bank account in the same name, never to a personal account.

The 8-point checklist

1. GSTIN active. Search it: status should be Active. See how to check a GST number.
2. Names match. GST legal or trade name = name on the quotation and invoice = name on the bank account you pay.
3. Filing history. Recent GSTR-3B returns. See how to check filing status.
4. Registration age. A registration from last month asking for a large advance deserves extra questions.
5. Address and state. The state code (first 2 digits) matches the address. Visit or video-call for large orders.
6. References. Ask for two current customers you can call, and look up what other businesses say (on REFFNET you can see disputes with the supplier’s reply).
7. Paper trail. A purchase order or written agreement with quantities, quality, delivery date and what happens if it’s late.
8. The invoice itself. Check it is a real GST invoice: see how to spot a fake GST invoice. For a company, also check its MCA record.

Safer ways to pay

• Start with a small first order before a large one.
• Split payment: part advance, rest on delivery or inspection.
• Pay by bank transfer to a current account in the business’s name; keep the proof.
• Be careful if bank details change by email or WhatsApp at the last minute: confirm by calling a number you already had.

Keep watching after the first order

A supplier that was fine last month can stop filing or close. In the REFFNET app, watch your regular suppliers: we check them every night and alert you about missed GST returns, status changes and new disputes.