Our customer comes in and purchases a negotiable instrument made payable from him to a third party vendor using over $10,000.00. Would our customer be the beneficiary? Or, since they are going to be receiving the negotiable instrument, would the third party vendor be the beneficiary and our customer the conductor?

Your customer is the beneficiary in Section A and Section B is left blank as you would check the "Conducted on own behalf" box.

If the customer is acting for his business (an entity), the business would be the person on whose behalf the purchase was made (Section A) and the individual will be listed in Section B.