Update Vendors Easily When Changing Banks - Secure Steps

Switching your business bank account is a big move-one that can boost your savings, streamline your operations, and help you earn more interest. But let’s be real: updating vendors when changing banks is one of those “don’t drop the ball” tasks. If you miss a step, you risk delayed payments, service interruptions, or even fraud. Here’s your friendly, step-by-step guide to updating vendors securely and simply, with plenty of real-world advice, answers to common questions like “how to change bank account?” and practical tips to keep your business humming along.

Why Updating Vendors Is Critical

Your vendors are the backbone of your supply chain, whether you’re a retailer, a service provider, or a growing SMB. They rely on accurate bank account information to process payments-think automated clearing house (ACH) transfers, wire transfers, and even instant payments through payment platforms and gateways. If your bank account details are outdated, here’s what could happen:

• Payments get delayed or rejected-No one likes chasing down a missing invoice or explaining to a vendor why their payment bounced.

• Vendors may charge late fees or suspend services-That’s a quick way to disrupt your operations or damage your reputation.

• Fraud risks increase-If updates aren’t handled securely, you open the door to data breaches or unauthorized changes.

A structured approach helps you avoid these headaches and keeps your accounts payable process running smoothly.

Step-by-Step Guide to Updating Vendors

1. Create a Vendor Inventory

Start by making a comprehensive list of every vendor who needs your new bank account information. This should include:

• Vendor names and contact details (email address, phone number, point of contact)

• Payment methods (ACH, wire, check, credit card, debit card)

• Frequency of payments (monthly, quarterly, per invoice)

• Any recurring purchase orders or scheduled bill pay

Pro Tip: Use your accounting software or past bank statements to identify all active vendors. Export a CSV file to keep things organized. This inventory is your roadmap-don’t skip it!

2. Notify Vendors of the Change

Reach out to each vendor with a formal notification about your new bank details. Here’s how to do it right:

• Use Multiple Channels: Send notifications via email and physical mail. For critical vendors, a quick phone call or message through their customer relationship management system helps ensure your update isn’t missed.

• Make It Stand Out: Use your company letterhead or a brightly colored envelope for mailed notices. In the subject line of your email, mention “Important: Update to Our Bank Account Information.”

• Include Key Details: Provide your new account number, routing number, and the effective date for the change. If your vendor uses a payment gateway or merchant account, include any changes to payment processor details as well.

Security Tip: Don’t include sensitive bank account information in the body of an email. Instead, attach a secure document or use a vendor portal with encryption.

3. Verify Vendor Contact Information

Before you send out your new bank details, double-check that you’re using the correct contact info-pull it from your existing records, not from a reply to your notification. This reduces the risk of fraud or data breach.

Pro Tip: If you’re using a customer relationship management (CRM) tool, verify contacts against your most recent data. For more on data management, visit our resources page.

4. Use Secure Communication Channels

Fraudsters love a bank switch. Protect your business by:

• Avoiding unencrypted emails or phone calls for sensitive data.

• Using secure vendor portals, encrypted email services, or even tokenization for sharing bank account information.

• Considering a Universal Payment Identification Code (UPIC) for ACH payments, which masks your sensitive account details.

5. Require Vendor Authentication

To prevent unauthorized changes:

• Ask vendors to complete an updated banking form that includes their old account details or recent transaction amounts for verification.

• Confirm changes verbally by calling the vendor using contact information you already have on file.

This step is crucial for reducing fraud risk and ensuring your vendors are who they say they are.

6. Track Vendor Updates

Keep a running log of which vendors have updated their records. Use a spreadsheet, a project management tool, or your Holdings dashboard to track responses and follow up with anyone who hasn’t replied within 7–10 business days.

Pro Tip: Automate reminders and confirmations when possible-automation saves time and reduces manual errors.

7. Test Transactions

Before you send out full payments, run a small test payment or instant payment to each vendor. Confirm they’ve received the funds and that your new account is working as expected.

• If you use a payment processor or payment gateway, update your merchant account and test the integration.

• For recurring payments, double-check that your accounts payable system is using the new details.

Common Mistakes to Avoid

• Sharing Banking Details Insecurely: Always use encrypted communications or secure portals.

• Skipping Verifications: Failing to authenticate vendor requests can lead to fraudulent changes.

• Assuming All Vendors Will Respond Quickly: Be proactive in following up.

• Closing Your Old Account Too Soon: Keep your old checking account open for 30–60 days to catch any missed payments or late invoice settlements.

How Holdings Simplifies Vendor Updates

Holdings is designed to make switching banks-and updating vendors-quick, secure, and stress-free:

• Integrated Financial Tools: Manage vendor payments, accounts payable, and even accounts receivable all in one place. No more juggling multiple software platforms or payment solutions.

• Real-Time Tracking: See which vendors have updated their records and monitor all transactions from a single dashboard.

• Zero Fees: Enjoy $0 monthly fees, no minimum balances, and premium features like high-yield savings accounts and money market accounts.

• Omnichannel Support: Whether you’re on a mobile app, desktop, or using our API, Holdings keeps your business connected.

• Top-Tier Security: All sensitive information is protected with encryption, tokenization, and best-in-class data security protocols.

Ready to make the switch? Open an account or schedule an appointment with our customer success team to get started.

Final Tips for Updating Vendors

• Start Early: Notify vendors as soon as your new account is active.

• Use Secure Methods: Always share sensitive information through secure channels.

• Keep Detailed Records: Document every update and confirmation-this helps with audits and future onboarding.

• Test Before Going Live: Run test transactions before processing full payments.

• Stay in Touch: Maintain open communication with vendors throughout the process.

Switching banks doesn’t have to disrupt your business. With Holdings, you get a financial partner that rewards your hustle-no fees, high APY, and a platform that handles the heavy lifting. For more on why we’re the best to switch to.

Frequently Asked Questions

How to change bank account? Start by opening your new account, then update your vendors, payroll, and any direct deposit details. Don’t forget to notify customers if you accept payments via ACH, credit card, or debit card.

How to change bank account on payment platforms (PayPal, Stripe, Square, Venmo, Zelle, Cash App, QuickBooks, Shopify, Etsy)?

Each payment provider has its own process-usually found in your account settings. Here’s how to update your bank information on the most popular platforms:

• PayPal: Log in, go to your Wallet, and click “Link a bank.” Follow the prompts to add or update your bank details.

• Stripe: Sign in, navigate to “Settings,” select “Bank accounts and scheduling,” and update your bank account.

• Square: Go to your Square Dashboard, select “Account & Settings,” then “Bank Accounts” to update your information.

• Venmo: In the app, tap the “☰” icon, select “Settings,” then “Payment Methods” to add or change your bank account.

• Zelle: Access Zelle through your bank’s app or website, and follow their instructions to update your linked account.

• Cash App: Tap the “Banking” tab, select “Linked Accounts,” and follow prompts to change your bank account.

• QuickBooks: Go to “Settings,” select “Payroll Settings,” then “Bank Accounts” to update your payroll bank details.

• Shopify: In your Shopify admin, go to “Settings,” then “Payments,” and update your bank account in the Shopify Payments section.

• Etsy: Sign in, go to “Shop Manager,” click “Finances,” then “Payment settings” to update your bank info.

After updating, most platforms will verify your new bank account with a small deposit or verification step. Be sure to confirm the change to ensure your payments process smoothly.

How to notify vendors securely? Use encrypted email, secure vendor portals, or upload documents via a trusted platform. Never send sensitive bank account information in plain text.

How to avoid fees and overdraft charges when switching checking accounts? Keep your old account open for 30–60 days and monitor both accounts. Holdings offers zero fees and no minimums, making it easier to avoid unnecessary charges.

How to change payroll bank account in QuickBooks or Xero? Update your bank account information in your payroll settings. Run a test paycheck to ensure everything’s working.

How do I change my bank account for tax refunds? Update your bank account details with the IRS or your tax software provider (like TurboTax) before filing.

Switching banks is a fresh start for your business finances. With Holdings, you get more than just a checking account-you get a financial sidekick that helps you earn, save, and grow. Ready to make your next move? Get started today and see how simple, secure, and rewarding business banking can be