How to pay a contractor safely as a landlord, with owner approval on every payment
Pay a contractor only after four things line up: the work was done, the invoice matches the quote, the paperwork is on file, and the owner approved this specific payment from the right property's bank account. Doing the same seven steps for every bill takes about two minutes and prevents the usual losses: double payments, payments to a fraudster's account and expenses booked to the wrong building.
What goes wrong when payment is casual
Contractor payments are where small landlords lose money without noticing. A vendor sends the same invoice twice and both get paid. An email "from the vendor" announces new bank details, and the next payment goes to a stranger. A bill for the duplex is paid from the account of the fourplex, and the books for both are wrong until someone untangles it at tax time.
None of these needs an expensive system to prevent. They need a fixed routine, one person who approves, and a record of who approved what.
The seven steps before any payment
- Match the invoice to a job. Find the work order or the quote it belongs to. No job, no payment until you know what it was for.
- Compare the amount to the quote or the agreed not-to-exceed price. Ask about any difference before paying.
- Check the invoice is new. Search the vendor's name and the invoice number for an earlier payment.
- Confirm the paperwork. For a vendor you have not paid before, collect a Form W-9 and, for larger jobs, a certificate of insurance.
- Confirm the payment details came from a source you trust. A change of bank details should be verified by calling a number you already had, never one in the email that announced the change.
- Pick the right account. The payment comes out of the bank account of the property the work was done on.
- Approve it, and record who approved it and when.
The IRS expects you to keep records that support every expense. Publication 583 explains what records a business should keep, and an invoice tied to a job, with an approval, is exactly that record.
Set approval limits so small bills do not slow you down
You do not need to study a $40 hardware bill for as long as a $4,000 roof repair. Decide the lines once:
| Bill size | What to do |
|---|---|
| Under a small limit you choose | Approve from the invoice if it matches a work order |
| Above that limit | Compare to the written quote, and look at the finished work or photos before approving |
| Any change of bank details | Verify by phone first, whatever the size |
| Any vendor paid for the first time | Collect the W-9 before the first payment |
Example a made-up owner sets the limit at $300. A $85 bill for a lock cylinder matches a work order, so it is approved in a minute. A $2,400 invoice for a water heater swap is checked against the $2,400 quote, and a photo of the installed unit is attached before approval. A third bill for $2,900 on that same job is held, because it is $500 above the quote, and the vendor is asked to explain the difference.
Keep the tax paperwork current as you go
Each payment adds to the vendor's total for the year. Vendors paid for services in the course of your rental business may need a Form 1099-NEC, which is filed by January 31 of the next year (IRS instructions for Forms 1099-MISC and 1099-NEC). If you record each payment against the vendor when it is made, the year-end report is a list you already have. Our post on who gets a 1099-NEC covers the rules.
How DoorKeeping handles it
In DoorKeeping, a vendor bill is read, filed to a property and an expense account, and held for your review. Lines that need a look are marked, and the bill cannot be approved until they are resolved. Approved bills are kept apart from paid ones, so you can see what is waiting on you. Your approval, who gave it and when, goes to your audit log. Anything involving money waits for your one-tap approval in the web app or from Claude or ChatGPT. Rent and payments stay in your own bank accounts. DoorKeeping never holds your money and sends a payment only when you approve it. It costs $2 per unit a month, every feature included, no setup and no minimum.
Sources
- IRS, Publication 583, Starting a Business and Keeping Records, read Oct 30, 2026
- IRS, Instructions for Forms 1099-MISC and 1099-NEC, read Oct 30, 2026
- IRS, Instructions for the Requester of Form W-9, read Oct 30, 2026
Questions
- Should I pay a contractor before or after the work is done?
- After, for most repairs, or in stages tied to finished work for larger jobs. Any deposit should be small and written into the quote.
- What should I check before paying a new contractor?
- That the invoice matches a job and a quote, that you hold a Form W-9 and (for larger jobs) a certificate of insurance, and that the payment details came from a source you trust.
- Who should approve payments on a rental property?
- The owner, or a person the owner names, and the approval should be recorded with the name and time.