Supplier Due Diligence Checklist
There is a lot of stress behind finding the right vendor. There is a way to help you through this stressful and overwhelming process. You can use a “supplier due diligence” checklist to help you. This checklist is used to help make sure that the vendor is capable of doing the work required of them. A checklist like this should always be used as a way to help with your research. After this checklist is completed by the vendor, you should be sure tovet the information provided to ensure that it is accurate.
What you should look for on your checklist:
When looking for a vendor that you need to count on for essential services, like a vendor for record keeping or IT, you want to make sure the company is financially stable. If the vendor company has money issues, they are at risk of shutting down and this could negatively affect your own business. This is easier if the company is a publicly traded company since this information has to be made public by law. For private companies, this could be significantly more difficult and would require intensive interrogation and using multiple references.
Security is likely very important to your business, especially if your company deals with financials or other confidential data. Therefore you want to make sure the vendor has top-notch security to protect your information. Not only do you want to make sure that their software is secure, you want to ensure their employees have to go through a screening process and background check in order to protect your company and its information. It is also wise to look at the vendor’s specific security controls and how they destroy data, both of which are important to security.
Just as you would when hiring a new employee, you will want to check the references of the vendor. You should get as many references as possible in order to get a good feel for the vendor and their services. Carefully interview these references because there are hints of information in even the ones who have positive things to say about the company.
If the laws require a specific license or certification in order to properly do its job, make sure that they have everything that is required by law. Otherwise you will not be protected in case something goes wrong, which could be costly in the long-run.
You will want to carefully look at the important personnel and management to find out any additional information that you can about the vendor. This can inform you of how much education and experience that they have in their field. You likely will be looking for a company that has a bit of experience in their industry.
When looking for a vendor to work with your company, it is crucial that you hire someone that is capable to complete all your tasks that you require of them and is someone that you can count on.