Strong vendor relationships form the foundation of successful businesses. But these relationships can’t be established without mutual trust. Vendors are deeply involved in business operations, and it’s critical to establish their reputation. Vendor background checks are thus an essential part of business operations.
Failure to do so can invite a string of risks and complications. Inconsistent or insufficient vendor background checks can lead to:
It’s important to know about the business, key individuals, and history when establishing new relationships with vendors. Here are some aspects to look into in company background checks:
Corporate Record Verification: Does the vendor have proper licenses and the required insurance levels. Has the company ever lost its license? Has it ever been placed on probationary status? It’s important to take a deep look at the company’s license history.
Civil Litigations and Criminal Convictions: Vendor background checks need to focus on the company’s criminal history. Is the company entangled in any lawsuit? Can these lawsuits impact the ability of the vendor to deliver services efficiently? Has the owner or a company executive ever resorted to illegal activities? Is there a registered FIR?
Regulatory Violations: It’s important to know whether the vendor has ever flouted regulatory norms. If the vendor has a habit of non-compliance, it can impact a partner company’s products and services.
Social Media: What do the customers of the company have to say about their services on social media? Companies can get a lot of information about the quality of their vendor services, from the latter’s business pages.
The employees of a vendor are often an extension of a partner company’s full-time workforce. They could be office custodial staff, food service personnel, security guards, drivers, etc.
These individuals should have a clean background to work as contractors or sub-contractors in an organisation. Here are some points to consider in vetting the non-employees:
Companies need to figure out their screening goals, based on the services availed and the requirements in the organisation or industry. First, it’s important to list and categorise each vendor, to understand the whole network and the risks involved.
Vendor background checks will differ based on the relationship. For instance, a vendor that provides workers to a company for on-site housekeeping would need searches for criminal history, driver records, and employment exclusions.
It’s important to choose a screening program that suits the company’s goals. The process can be tedious and costly. Many blue-collar workers falsify information that is difficult to identify. The lack of documents to corroborate information makes the process lengthier.
Technology-based platforms can make it easy to automate vendor background checks across multiple locations and worksites. Platforms with embedded compliance are a necessity.
This makes it faster for companies to avail services or deploy non-employees when the need arises. For instance, a company might need additional security guards to man a construction site at a critical stage.
It’s important to understand unscreened vendors are a serious threat to the brand reputation and an organisation’s assets.
BetterPlace makes vendor due diligence easier, scalable, and customisable. Companies can access automated investigations based on different parameters, which saves time and resources. Contact us to learn more.
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