Tax Season Payment Errors That Trigger Rework: 12 Common Mistakes In Cross-Border AP And How To Avoid Them

Key takeaways

• Most cross-border payment rework is caused by preventable issues like missing beneficiary details, wrong IBANs, and unclear references.

• Tax season adds friction because documentation requests (W-9, W-8) and year-end reporting workflows collide with already busy AP cycles.¹ ²

• The fastest way to reduce delays is to standardize intake, validate once, schedule earlier, and keep an escalation checklist for exceptions.

Tax season is when cross-border AP workflows tend to crack. Not because international payments are inherently unpredictable, but because teams are juggling onboarding documentation, vendor updates, month-end cutoffs, and higher approval volume all at the same time.

The result is familiar: returned payments, suppliers asking where funds are, and internal rework that eats hours across AP, treasury, and finance ops.

Below are 12 common mistakes that show up during tax season, plus practical fixes you can implement without rebuilding your entire payments stack.

Why Tax Season Creates More Payment Rework

Tax season adds pressure in three ways:

• More documentation churn.

  Teams realize a contractor or vendor is missing the right form, such as a W-9 for a US person or a W-8 for a foreign person.¹ ²

• More “urgent changes.”

  Vendors update bank details, finance teams update systems quickly, and errors slip in.

• Less time to recover.

  Cutoffs, holidays, and approval bottlenecks reduce your buffer, so small mistakes become late payments.

The goal is not perfection. It is a repeatable workflow where exceptions are handled quickly and the same mistakes stop recurring.

The 12 Mistakes That Cause The Most Cross-Border AP Rework

A practical snapshot table you can share internally

Now let’s break these down with fixes you can implement right away.

Documentation Mistakes: The Tax Season Triggers

1. Requesting The Wrong Form (W-9 vs W-8)

A W-9 is typically used to provide a correct taxpayer identification number (TIN) to payers required to file information returns.¹ A W-8 is used to document foreign status when requested by the withholding agent or payer.²

Fix: Add a single gating question to onboarding:

• Is the payee a US person or a foreign person?

  
  

  Then route to the correct form request.

2. Paying Before Documentation Is Complete

This is the classic tax-season boomerang: the payment goes out, then later someone realises the documentation is incomplete.

Fix: Make the first payment conditional on:

• tax form received and stored

• bank details verified

• payee record approved

If a vendor relationship is urgent, treat it as an exception workflow with a clear owner and timeline, not a “we’ll fix it later” situation.

3. Confusing Contractor Reporting With Payment Ops

Teams often mix up “how we pay” with “how we report.” 1099-NEC is used to report nonemployee compensation.³ Some payments to foreign persons may fall into different reporting processes, including 1042-S in certain situations.⁶

Fix: Keep two separate checklists:

• Payment checklist

  (bank details, routing, references, timing)

• Reporting checklist

  (forms and classification)

This prevents AP from trying to solve tax questions in the payment screen.

Payment Data Mistakes: Where International Transfers Get Stuck

4. Beneficiary Name Does Not Match The Bank Record

Even small mismatches can trigger repairs, especially when banks run automated checks.

Fix: Store a “Beneficiary Name (On Account)” field and enforce copy-paste from the vendor’s official bank instruction document.

5. Missing Beneficiary Address (Or Only A Country)

Some corridors, banks, and compliance screening workflows rely on complete address data.

Fix: Collect full address upfront and treat it as conditional-required based on corridor or provider rules.

6. Wrong IBAN (Or “Formatted” By Hand)

IBAN errors are one of the most common reasons EUR payments get returned.

Fix: Make IBAN a dedicated field with format validation (no manual reformatting). If you need a quick format check, validate before the first payment and lock the value in your vendor master.

7. Wrong Or Missing SWIFT/BIC

A BIC is an 8-character code with an optional 3-character branch identifier, which is why many systems accept 8 or 11 characters.⁵

Fix: Add a validation rule:

• BIC must be 8 or 11 characters

• match expected bank country

• must not be a domestic routing number pasted into the wrong field

8. Guessing Intermediary Bank Details

Intermediary and correspondent bank fields are not “optional extras.” They should be entered only when provided.

Fix: Add a gate question:

• “Does the vendor require an intermediary bank?”

  
  

  If “No,” hide the intermediary fields.

9. Sending The Wrong Currency To The Wrong Account

Some vendors maintain different account details for different currencies. Sending EUR to an account intended for USD can cause delays or rejection.

Fix: Require vendors to provide currency-specific instructions:

• “EUR account details”

• “USD account details”

  
  

  Treat them as separate payee profiles if needed.

Process Mistakes: Why “It Should Have Worked” Still Gets Stuck

10. Weak Or Unclear Payment References

Unclear references do not always cause a bank reject, but they create real rework: suppliers cannot match funds to invoices quickly.

Fix: Enforce a short reference pattern across all cross-border payments:

• Invoice Number | PO Number | Vendor ID

11. Forgetting Cutoffs And Bank Holidays

Many “stuck” payments are simply not processing today. Federal Reserve service holidays affect some USD payment operations, and EUR settlement timing is affected by TARGET closing days.⁴ ⁵

Fix: Build buffer time into your pay run:

• avoid initiating critical payments on the due date

• avoid late-Friday approvals for Monday receipt

• check holiday calendars at month end

12. No Tracking And No Escalation Path

When a vendor says “not received,” the worst first move is often “just resend it.” That is how duplicate payments happen.

Fix: Use a standard internal escalation checklist:

• payment confirmation receipt

• value date and currency

• beneficiary details used

• tracking or trace request with your bank or provider

• confirm whether a compliance query is open

A Simple Tax Season Cross-Border AP Workflow

Use this as a repeatable cadence through March and April.

Pre-season setup (one-time)

• Standard vendor intake form (tax + bank details)

• Vendor master cleanup: remove duplicates, lock verified records

• Define approval cutoffs and pay run cadence

Weekly pay run routine

• Lock the knowns:

  firm, dated payables first

• Validate exceptions:

  new vendors, changes, high-value payments

• Schedule earlier:

  avoid due-date initiation

• Track and resolve:

  use the escalation checklist for outliers

If you need predictable pay timing, scheduled payments can help align release timing with approvals. If you pay multiple overseas vendors per run, batch payments can reduce manual entry and rework.

“Before You Hit Send” Checklist

A short checklist AP can actually follow:

• Beneficiary name matches the bank record

• IBAN or account number copied exactly

• SWIFT/BIC validated (8 or 11 characters)⁵

• Currency matches the receiving account

• Intermediary bank fields only filled if provided

• Reference includes invoice number and is short

• You are not initiating on a bank holiday or after cutoffs⁴ ⁵

• Payment confirmation saved to the vendor record

FAQ

Do we always need W-8 forms for overseas payees?

Not always, but W-8 forms are used to document foreign status when requested by the payer or withholding agent.² Your requirements depend on facts and jurisdiction.

Why do EUR payments get returned so often?

Usually it is data quality: wrong IBAN, missing BIC, name mismatch, or routing fields guessed. Standard intake plus validation fixes most of it.

What is the fastest change to reduce rework this tax season?

A structured intake form plus a locked vendor master. Collect once, validate once, then reuse.

Should we resend a payment if a vendor says they did not receive it?

Usually no. Start with proof, tracking, and beneficiary verification before you resend to avoid duplicates.

Conclusion

Tax season payment rework is usually not a banking mystery. It is predictable: missing forms, inconsistent vendor data, rushed approvals, and timing issues like holidays and cutoffs. The fix is also predictable. Standardise intake, validate once, schedule earlier, and use a clear escalation path for exceptions.

How Xe Helps

Xe is not a bank, but many finance teams pair Xe with their primary business bank account to manage cross-border AP more predictably. Xe can help you send international payments, reduce last-minute execution pressure with scheduled payments, streamline supplier runs with batch payments, and strengthen operational controls with security and fraud guidance.

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The content within this blog post is for informational purposes only and is not intended to constitute financial, legal, or tax advice. All figures and data are based on publicly available sources at the time of writing and are subject to change. Actual conditions may vary depending on location, timing, and personal circumstances. We recommend consulting official government resources or a licensed professional for the most up-to-date and personalized guidance.

Citations

¹ Internal Revenue Service — About Form W-9 — (2026)
² Internal Revenue Service — About Form W-8BEN — (2025)
³ Internal Revenue Service — About Form 1099-NEC — (2026)
⁴ Federal Reserve Financial Services — Holiday Schedules — (2026)
⁵ Swift — Business Identifier Code (BIC) — (2026)
⁶ Internal Revenue Service — About Form 1042-S — (2026)
⁷ European Central Bank — ECB Public Holidays And TARGET Closing Days — (2026)

Information from these sources was taken on February 5, 2026.