BILL vs Tipalti for Registered Investment Advisors

It's tempting for a small advisory firm to treat its own AP informally, a partner approves an invoice by email, someone pays it from the operating account, and nobody writes down why a new vendor was selected over another. That informality is exactly what an examiner probes: not whether the firm paid its bills, but whether it can produce a consistent, documented process for vendor selection and payment approval, particularly for vendors that touch client data or custody-adjacent functions, and whether that process was actually followed every time, not just when it was convenient.

For the great majority of advisory firms, whose vendor list is entirely domestic and whose payment volume is modest, BILL's approval routing and exportable approval history cover the recordkeeping need well. It gives the firm a clean, timestamped record of who approved a given vendor payment, which is exactly the kind of documentation a chief compliance officer wants on hand rather than reconstructed after an exam request lands on their desk with a short deadline attached.

Tipalti's core strength, mass payouts to a variable, self-onboarding payee population, has little relevance to a typical RIA's own operating payables, which involve a small, stable vendor list the firm chose deliberately rather than a shifting population of external payees. Unless the firm has an unusual structure that involves paying out to a large network of sub-advisors or referral partners at scale, Tipalti's complexity is more than the business needs.

Compliance-minded RIAs increasingly document due diligence on vendors that touch sensitive client data, custodians, portfolio management software, cybersecurity providers, separate from the payment approval workflow itself. Whichever AP tool a firm uses, that due diligence documentation should live somewhere retrievable and tied to the vendor record, since a payment approval trail alone doesn't answer an examiner's question about why the firm trusted that vendor with client information in the first place, only that a payment was authorized.

A firm doesn't need its chief compliance officer approving every routine software renewal, but new vendor relationships, particularly anything touching custody, client data, or a material service the firm depends on, deserve a documented compliance review before the first payment goes out. Building that checkpoint into the approval workflow itself, rather than relying on someone remembering to loop in compliance, is what keeps the documentation trail intact without becoming a bottleneck on routine spend.

Say an examiner asks the firm to produce its approval and due diligence record for its portfolio management software vendor, selected three years ago. A firm with a documented, timestamped approval trail and a due diligence record tied to that vendor can respond within a day. A firm relying on informal email approvals and institutional memory has to reconstruct the story from people who may not remember the details, which is a far worse position to be in during an active exam than the underlying vendor relationship itself deserves.

None of this requires a large operations staff. A firm with a chief compliance officer wearing several hats can still run a clean process: a simple approval workflow for routine spend, a short, written due diligence checklist for any new vendor touching client data, and a habit of tagging that checklist to the vendor record the moment onboarding happens rather than after the fact. The goal isn't complexity, it's making sure the documentation exists at all, consistently, so an exam request is an easy retrieval rather than a research project.

A clean process for a small advisory team has these parts:

1. Set up a simple approval workflow for routine spend so every payment has a timestamped record of who approved it.
2. Write a short due diligence checklist for any new vendor that touches client data, custody, or a material service.
3. Send new vendor relationships through a documented compliance review before the first payment goes out.
4. Tag each completed check to the vendor's record so approvals and due diligence can be produced together during an exam.