> For clean Markdown of any page, append .md to the page URL.
> For a complete documentation index, see https://docs.mercoa.com/embedded-ap-ar/guides/accounts-receivable/creating-and-managing-vendors/llms.txt.
> For AI client integration (Claude Code, Cursor, etc.), connect to the MCP server at https://docs.mercoa.com/_mcp/server.

In accounts receivable (AR), C2s are the vendor entities that want to create and send invoices on your platform. They **MUST** be businesses -- they cannot be individuals.

In Mercoa, you'll need to create a **vendor** for each of your customers that will be sending invoices to their clients through your platform, and verify each of your customers if you're using Mercoa's built-in payment rails.

# Creating Vendors

Vendors can be created in the [dashboard](https://mercoa.com/dashboard) or with the [create entity](/api-reference/entity/create) endpoint.

## Creating the Vendor Entity

Using the [create entity](/api-reference/entity/create) endpoint, create a new entity and make sure the following fields are set:

```ts
{
  isPayee: true // This marks the entity as able to receive funds
  isPayor: false // This marks the entity as unable to pay funds
  isCustomer: true // This indicates that you have a direct relationship with this entity (aka, they are your customer)
}
```

## Capturing Payer Details

If you don't have the vendor's details, Mercoa can capture them for you automatically using the [React component](/react-library/overview) or embed. When generating the token, make sure to set `enableMercoaPayments` to `true`.

You can also use the [generate onboarding link](/api-reference/entity/get-onboarding-link) endpoint to create a direct link that the payer can use to provide their details. This link will be valid for 24 hours. You can also use the [send onboarding email](/api-reference/entity/send-onboarding-link) endpoint to send the link to the payer via email. This link will be valid for 7 days, and will be emailed to the entity email.

You can configure what details are required for the vendor using the [dashboard](https://mercoa.com/dashboard/developers#customizations) or [API](/api-reference/organization/update).

# Verifying Vendors (C2s)

If you're using Mercoa's built-in payment rails, your C2 vendor entities will also need to undergo a KYB (Know Your Business) verification process before they can collect funds through Mercoa.

Banking regulations require that financial institutions perform a KYB process to verify an individual or business identity before enabling certain capabilities. All Mercoa accounts are also checked against OFAC (Office of Foreign Assets Control) and sanctions lists to ensure they are not forbidden from conducting business in the United States.

## Vendor (C2) KYB Requirements

| Business                                                              |
| --------------------------------------------------------------------- |
| Legal name                                                            |
| Website or description                                                |
| Business type                                                         |
| EIN                                                                   |
| Address                                                               |
| Phone                                                                 |
| [Business Representatives](/common-concepts/business-representatives) |
| Industry MCC (Merchant Category Code)                                 |
| Average transaction size                                              |
| Average monthly transaction volume                                    |
| Maximum transaction size                                              |
| Accept Terms of Service                                               |

Separate from KYB, Mercoa business entities must verify business representatives before a business account can be verified.
[Learn more here](/common-concepts/business-representatives)

**Note:** Individuals cannot collect funds as a vendor entity through Mercoa's payment rails, and thus cannot undergo KYB verification.