When it comes to paying vendors, at what point do I need to collect a W9?

That sounds right, but in my experience it's a good idea to get the W9 before you pay them anything. Vendors have a tendency not to get you that information when you need it, especially if you only use them periodically. I have found the best way to be sure you get the W9 is to have them submit it before you send the first payment.

The best time to obtain the W-9 is prior to the first payment. The second best time is prior to the payment that puts you over $600 for the year.

You should collect a signed Form W-9 at the time you have the vendor sign the subcontractor agreement. It's always a best practice to have the form included as part of the onboarding package for when you hire a vendor or bring a subcontractor on board with your team. At the latest, the Form W-9 should be provided before you remit payment to the vendor or contractor. If you don't receive the signed Form W-9, you are technically required to impose backup withholding upon the gross payment and remit the taxes to the IRS.