A lot of businesses rely on vendors to supply labor, parts, or services on an ongoing basis. But, depending upon third parties can be risky, even if necessary. If, for some reason, one of your main vendors goes out of business or conducts business in an unprofessional manner, it can expose your own company to unnecessary risk. That’s why it is imperative that you thoroughly screen each of your vendors and perform background checks on them. Today, I’ll highlight the problems that can occur if you don’t.
Vendor Screening Ensures Consistency
When your company hires vendors to supply parts or labor, you have an expectation that they will deliver consistently. If they fail, it can place your company in an awkward position. After all, any interruption in your daily operations can have a severe impact on your business. Your customers may lose faith in your ability to deliver.
By doing background checks on your vendors, you can determine how dependable they’ll be. Have they employed people who have a criminal record? Do your vendors have employees with a substance abuse problem? Have other companies filed complaints or lawsuits against your vendors? If so, why? Are any of your vendors on the brink of insolvency?
Any of these issues can have devastating results for your company. For example, a vendor who supplies important materials to your business, and files for bankruptcy, can bring your operations to a grinding halt. Or, a vendor to whom you’ve subcontracted for labor may place ex-convicts on site and expose your business to liability.
Background Checks On Vendors
Your company needs to screen vendors and conduct background checks to ensure that they are reliable, consistent, and won’t expose your company to costly lawsuits. This due diligence should include criminal checks, credit checks, a review of DMV records (if you’re hiring drivers), and verification of licenses, permits, and certifications. It is the only way to avoid hiring a vendor who may potentially lead your company toward disaster.
Establish vendor screening protocols as soon as possible. If you don’t have the hiring staff available to conduct extensive background checks on your vendors, consider partnering with an experienced screening service.
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